1- 


^  ~1 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


A    LIVING   WAGE 


f^y^' 


A  Living  Wage 

ITS    ETHICAL     AND 
ECONOMIC  ASPECTS 


BY 


JOHN  A.  RYAN,   S.  T.  D. 

PROFESSOR  OF  ETHIC3  AND  ECOROMICS 
IN  THE  ST.  PAUL  SEMINARY 


WITH  AN  INTRODUCTION  BY 

RICHARD  T.  ELY,  Ph.  D.,  LL.  D. 


THE  MACMILLAN  COMPANY 

LONDON  :  MACMILLAN  &  CO..  LTD. 
I912 

^//  rithti  rtstrvid 


Copyright,  1906, 
By  the  MACMILLAN  COMPANY. 


Set  up  and  electrotyped.     Published  April,  1906.     Reprinted 
April,  1908  ;  October,  1910  ;  March,  1912. 


/?/2. 


TO 

RICHARD  T.  ELY,  Ph.  D.,  LL.  D. 

Through  whose  Writings  the  Author 

first  became  interested  in  the 

Study  of  Economic 

Problems 

%\i\i  15oo&  ti9  DeHicateD 


AUTHOR'S  PREFACE 

This  work  does  not  profess  to  present  a  complete 
theory  of  justice  concerning  wages.  It  lays  down 
no  minute  rules  to  determine  the  full  measure  of 
compensation  that  any  class  of  laborers  ought  to  re- 
ceive. The  principles  of  ethics  have  not  yet  been 
applied  to  the  conditions  of  modern  industry  with 
sufficient  intelligence,  or  confidence,  or  thoroughness, 
to  provide  a  safe  basis  for  such  an  undertaking.  The 
conclusions  to  which  it  would  lead  would  be  either 
too  general  to  be  of  any  practical  value,  or  too  uncer- 
tain to  yield  more  than  a  misleading  approximation 
to  ethical  truth.  At  any  rate,  the  doctrine  advanced 
would  probably  fail  to  convince  any  considerable  sec- 
tion of  those  to  whom  it  was  addressed.  The  great 
majority  of  fair-minded  persons  believe,  indeed,  that 
labor  does  not  get  its  full  share  of  the  wealth  that  it 
helps  to  create,  but  they  are  not  agreed  as  to  the 
precise  measure  of  that  ideal  share. 

Upon  one  principle  of  partial  justice  unprejudiced 
men  are,  however,  in  substantial  agreement.  They 
hold  that  wages  should  be  sufficiently  high  to  enable 
the  laborer  to  live  in  a  manner  consistent  with  the 
dignity  of  a  human  being.  To  defend  this  general 
conviction  by  setting  forth  the  basis  of  industrial,  re- 
ligious and  moral  fact  upon  which  it  rests,  is  the  aim 
of  the  present  volume.  Several  considerations  have 
vil 


A    LIVING    WAGE 

led  the  author  to  think  that  this  task  is  well  worth 
while.  In  the  first  place,  the  Living  Wage  doctrine 
points  the  way  to  a  very  considerable  amelioration  of 
the  condition  of  millions  of  American  workingmen ; 
in  the  second  place,  a  Living  Wage  would  enable 
those  raised  to  its  level  to  improve  their  position 
still  further;  and,  in  the  third  place,  this  volume 
shows  that  religion,  as  represented  by  the  oldest  and 
largest  of  the  Christian  denominations,  professes, 
nay,  urges,  a  definite  and  considerable  measure  of 
industrial  justice. 

While  insisting  that  every  laborer  has  a  right  to  at 
least  a  Living  Wage,  the  author  does  not  commit 
himself  to  the  view  that  this  quantity  of  remuneration 
is  full  and  adequate  justice  in  the  case  of  any  class  of 
laborers.  His  concern  is  solely  with  the  ethical  min- 
imum. 

The  permission  of  the  Editors  of  the  Catholic 
University  Bulletin  and  the  Catholic  World  to  re- 
produce those  portions  of  the  work  that  have  al- 
ready appeared  in  their  publications,  is  gratefully 
acknowledged.  In  the  same  spirit  the  author  wishes 
to  record  his  indebtedness  to  the  professors  of  the 
Catholic  University  of  America  under  whose  direc- 
tion the  first  draft  of  the  work  was  written,  namely, 
Dr.  Bouquillon,  who  has  since  gone  to  his  reward 
eternal,  and  Dr.  Neill,  who  is  at  present  the  efficient 
Chief  of  the  United  States  Bureau  of  Labor ;  and  to 
Dr.  Ely  of  the  University  of  Wisconsin,  who  read 
the  work  in  manuscript  and  wrote  the  Introduction, 
and  whose  advice,  assistance,  and  eftcouragement 
have  been  frequent  and  invaluable.  If  the  author 
viii. 


AUTHOR'S    PREFACE 

were  to  single  out  for  especial  acknowledgfment  any 
of  the  writers  whose  works  have  aided  him  in  the 
preparation  of  his  own,  he  would  mention  the  names 
of  Sidney  and  Beatrice  Webb  and  of  John  A.  Hob- 
son;  for  these  seem  to  him  to  have  analysed  and 
treated  the  principal  industrial  facts  with  which  he 
has  had  to  deal  in  a  more  adequate  and  vital  way  than 
any  other  writers  with  whom  he  is  acquainted. 

John  A.  Ryan. 
St.  Paul,  Minn. 
March,  ipo6 


ix 


INTRODUCTION 

I  am  glad  to  have  an  opportunity  to  point  out 
briefly  the  significance  of  Professor  Ryan's  book, 
as  it  impresses  itself  on  my  mind.  We  have  had 
repeated  efforts  to  stimulate  the  conscience  of  the 
Christian  world  to  a  keener  appreciation  of  its  duties 
to  the  men,  women  and  children  who  toil  for  wages. 
Christian  socialism,  so-called,  has  been  presented 
frequently  by  men  of  various  religious  denomina- 
tions. A  greater  sensitiveness  to  right  and  wrong 
in  economic  affairs  has  undoubtedly  been  the  result 
of  this  preaching  of  righteousness.  Enlightenment 
has,  however,  not  kept  pace  with  good  intention.  On 
the  contrary,  nothing  is  more  noticeable  than  the 
confusion  of  mind  which  very  generally  accompanies 
good  intention.  The  "plain  man"  of  whom  we  hear 
so  much,  has  a  feeling  that  our  teachers  and  preach- 
ers are  vague  and  indefinite.  Is  there  after  all  such 
a  thing  as  a  Christian  doctrine  of  wages  ?  The  writer 
of  this  book,  a  priest  in  the  Roman  Catholic  Church 
and  a  teacher  in  St.  Paul  Seminary,  a  theological 
school  of  that  Church,  presents  to  us  in  the  following 
pages,  a  clear-cut,  well-defined  theory  of  wages, 
based  upon  his  understanding  of  the  approved  doc- 
trines of  his  religious  body.  There  have  been  at- 
tempts in  other  lands  to  deduce  from  the  teachings  of 
this  Church,  clear  and  precise  directions  for  our  in- 


A    LIVING    WAGE 

dustrial  life.  We  recall  the  works  of  Bishop  von  Ket- 
teler  of  Mainz  and  the  more  conservative  writings  of 
Professor  Charles  Perin  of  the  University  of  Lou- 
vain  in  Belgium.  While  Cardinal  Manning  of  Eng- 
land some  years  ago  startled  the  English-speaking 
world  by  his  enunciation  of  the  right  of  man  to  a 
subsistence  as  prior  to  the  rights  of  property  as  a 
doctrine  of  the  Church,  and  while  Cardinal  Gibbons 
in  the  United  States  has  on  several  occasions  ex- 
pressed himself  firmly  and  positively  in  regard  to  the 
rights  of  labor,  the  present  work  is,  so  far  as  I  am 
aware,  the  first  attempt  in  the  English  language  to 
elaborate  what  may  be  called  a  Roman  Catholic  sys- 
tem of  political  economy.  When  I  say,  a  Roman 
Catholic  system  of  political  economy,  I  mean  an  at- 
tempt to  show  exactly  what  the  received  doctrines  of 
the  Church  signify  in  the  mind  of  a  representative 
Catholic  when  they  are  applied  to  the  economic  life. 
It  strikes  me  as  a  meritorious  performance  at  the 
present  juncture  to  endeavor  to  express  as  precisely 
as  may  be  what  Christianity  has  to  say  about  wages. 
While  members  of  other  religious  bodies.  Chris- 
tian and  Jewish,  cannot  receive  the  doctrine  of  wages 
here  set  forth  merely  because  it  is  assumed  to  rest 
on  the  approved  teachings  of  the  Roman  Catholic 
Church,  they  are  not  precluded  from  an  examination 
of  this  question:  Does  or  does  not  this  doctrine  of 
wages  rest  upon  broad  Christian,  religious  and  ethic- 
al foundations?  It  will  be  observed  that  Professor 
Ryan  combines  economic  and  ethical  arguments  with 
those  derived  from  authority  and  that  it  is  by  no 
means  impossible  to  receive  arguments  of  the  first 


INTRODUCTION 

class,  while  refusing  adhesion  to  those  of  the  second 
class.  My  own  feeling  then  is  that  this  book  is  to  be 
welcomed  as  an  attempt  on  the  part  of  a  religious 
teacher  to  get  beyond  vague  and  glittering  general- 
ities to  precise  doctrine,  and  to  pass  from  appeals  to 
sentiment  to  reasoned  arguments. 

While  I  have  ventured  in  these  few  words  to  show 
what  in  my  opinion  is  the  significance  of  the  present 
work,  it  is  manifestly  altogether  beyond  my  province 
now  and  here  to  express  any  views  of  my  own  in  re- 
gard to  the  correctness  of  its  conclusions. 

Richard  T.  Ely. 
University  of  Wisconsin 
February,  ipo6 


CONTENTS 

Page 
Preface  vii 

Introduction  xi 

SECTION  I 

Introductory  and  Historical 

Chapter 

I    Economic  and  Legal  Presumptions  Against 

a  Living  Wage  3 

II     Some  Authorities   in   Favor  of  an   Ethical 

Standard  for  Fixing  Wages  23 

SECTION  II 

The  BasiSj  Nature,  and  Content  of  the 
Right  to  a  Living  Wage 

III  The  Basis  and  Justification  of  Rights  43 

IV  The  Right  to  Subsistence  and  the  Right  to 

a  Decent  Livelihood  d"] 

V    The  Right  to  a  Personal  Living  Wage  81 

VI     The  Right  to  a  Family  Living  Wage  no 

VII    A  Concrete  Estimate  of  a  Living  Wage  123 

SECTION  III 

Economic  Facts  by  Which  the  Right  is 
Conditioned 

VIII    The  Underpaid  Laborers  of  America:  their 

Number  and  Prospects  153 


CONTENTS 

IX 

Our    Industrial    Resources    and 

a    Living 

Wage  for  All 

178 

X 

The  Forces  that  Regulate  Price 

190 

XI 

Rent 

199 

XII 

Profits 

207 

XIII 

Interest 

211 

XIV 

Wages 

SECTION  IV 

222 

The   Obligations   Corresponding  to  the 
Right 

XV    The  Obligation  of  the  Employer  237 

XVI     The  Obligation  of  the  Loan-Capitalist,  the 

Landowner,  the  Consumer,  and  the  Man 

of  Wealth  262 

XVII    The  Obligation  of  the  Laborer  280 

XVIII    The  Obligation  of  the  State  297 

XIX    Summary  and  Conclusion  324 

Works  of  Reference  333 

Index  341 


SECTION   I 

INTRODUCTORY  AND 
HISTORICAL 


CHAPTER  I 

Economic  and  Legal  Presumptions  Against  a 
Living  Wage 

Wages  at  present  determined  by  the  unlimited  use  of  bar- 
gaining power.  Attitude  of  the  bargainers  toward  the 
moral  aspects  of  the  wage-contract.  The  theory  of  a  wage- 
fund.  The  supposed  effect  of  economic  laws.  Nature  of 
an  economic  law,  and  sense  in  which  it  determines  the  rate 
of  wages.  Teaching  of  the  classical  economists,  and  pre- 
sumptions underlying  it.  Adam  Smith's  belief  in  individual 
liberty  and  enlightened  self-interest  shared  by  all  his  follow- 
ers. These  assumptions  discredited  by  the  facts  of  English 
industrial  history,  and  rejected  by  present  day  economists. 
Modern  legislation  recognizes  the  method  of  unlimited  bar- 
gaining. Causes  of  this  attitude.  Economic  and  legal  pre- 
sumptions against  a  moral  standard  of  wages  are  invalid 
because  their  basis  is  unsound. 

I.  The  Present  Method  of  Fixing  Wages.— The 
doctrine  that  every  laborer  has  a  moral  right  to  a 
Living  Wage  is  obviously  in  direct  conflict  with 
existing  business  practice  and  theory.  In  the  great 
majority  of  wage-contracts,  a  decent  livelihood  for 
the  worker  is  not  among  the  aims  that  are  conscious- 
ly and  earnestly  sought  by  both  parties.  Sometimes 
it  is  not  explicitly  thought  of  by  either  of  them. 
The  amount  of  remuneration,  as  well  as  the  hours 
and  other  conditions  of  employment,  are  fixed  by 

3 


A    LIVING    WAGE 

the  method  of  bargaining,  according  to  which  both 
employer  and  employee  try  to  obtain  the  best  terms 
possible.  The  latter  strives  to  get  as  much  as  he 
can  ;  the  former,  to  pay  no  more  than  he  must.  Both 
will  derive  some  advantage  from  the  bargain,  but 
more  for  one  will  mean  less  for  the  other.  The 
greater  share  of  gain  will  be  reaped  by  the  stronger 
bargainer.  When,  through  a  combination  of  labor- 
ers, or  employers,  or  both,  collective  is  substituted 
for  individual  action,  the  end,  the  procedure,  and 
the  determining  factors  are  essentially  the  same :  the 
decisive  element  is  not  moral,  but  psychical  and 
economic,  namely,  the  relative  bargaining  power  of 
the   contracting   parties. 

There  are,  indeed,  many  wage-contracts  in  which 
bargaining  power  has  no  place,  and  many  others  in 
which  it  is  not  the  final  determinant.  The  remuner- 
ation of  a  large  proportion  of  government  employees 
is  fixed  by  law,  and  in  some  of  the  older  trades  and 
services  bargaining  is  limited  by  custom.^  Again, 
there  are  to  be  found  employers  who  will  not  force 
wages  below  what  they  regard  as  a  fair  level,  just  as 
there  are  laborers  who  will  not  exact  compensation 
that  they  believe  to  be  unjust.  On  the  whole,  how- 
ever, the  labor-contracts  affected  by  these  forces  of 
law,  custom  and  moral  convictions  are  exceptional.- 

So  much  for  the  prevailing  practice ;  what  of  the 
underlying  ethical  theory?     Are  the  laborers  who 

'Cf.  Nicholson,  "Principles  of  Political  Economy,"  I,  p.  325. 

'  Instances  where  the  employer,  believing  in  the  "economy 
of  high  wages,"  willingly  pays  more  than  the  bargaining  power 
of  the  laborer  could  command,  do  not  constitute  exceptions  to 
the  general  rule,  for  even  here  the  former  tries  to  get  his  work 
done  as  cheaply  as  possible. 


AGAINST    A    LIVING    WAGE 

try  to  get  all  that  they  can,  and  the  employers  who 
pay  no  more  than  they  must,  utterly  indifferent  to 
the  questions  of  right  and  wrong  involved  in  the 
wage-contract?  Or,  has  business  become  so  widely 
separated  from  ethics  that,  although  desirous  of 
being  fair  to  each  other,  the  parties  to  the  labor- 
contract  do  not  advert  in  any  way  to  its  ethical  as- 
pects? Or,  do  they  explicitly  maintain  that,  despite 
frequent  and  grave  differences  in  the  bargaining 
power  of  the  parties,  the  transaction  is  essentially 
just?  All  three  of  these  attitudes  are  undoubtedly 
represented  among  both  employers  and  employed.  In 
fixing  wages,  as  in  other  actions,  there  are  men  who 
will  not  hesitate  to  gain  their  ends  by  deliberate 
dishonesty  and  extortion.  Others  ignore  the  moral 
side  of  the  wage-contract  merely  because  it  does  not 
attract  their  attention ;  they  are  conscious  only  of  a 
business  transaction.  The  greater  number,  however, 
of  those  who  strive  to  make  the  best  possible  bar- 
gain, regardless  of  any  formal  ethical  standard  of 
wages,  seem  to  think  that  the  contract  is  fair,  inas- 
much as  it  is  free  and  made  under  the  rule  of  com- 
petition. To  a  very  large  extent  this  notion,  as  well 
as  the  attitude  of  those  who  quietly  ignore  the  moral 
aspect  of  the  rate  of  wages,  is  the  result  of  practical 
deductions  from  the  teaching  of  the  earlier  English 
political  economists.  "Indeed  we  may  say  that 
political  economy  has  importantly  modified  ethical 
conceptions ; so  that  the  price  which  com- 
petition tends  at  any  time  to  fix  as  the  market  price 
of  any  kind  of  services,  has  been  taken  to  represent 
the    universal    or    social — and    therefore    morally 

5 


A    LIVING    WAGE 

valid — estimate  of  the  'real-worth'  of  such  services."* 
Now  if  political  economy  warrants  this  popular 
conclusion  it  creates  at  once  a  presumption  of  some 
value  in  favor  of  the  justness  of  wages  that  are  de- 
termined by  the  method  of  unlimited  bargaining. 
The  method  is  apparently  sanctioned  by  the 
authority  of  science.  To  what  extent  is  this  true? 
It  will  conduce  to  clearness  if  a  distinction  be 
made  between  political  economy  as  a  system  of 
supposedly  rigid  laws,  and  the  practical  precepts 
that  have  been  laid  down  for  the  guidance  of  in- 
dustry by  a  certain  school  of  economists. 

II.  Economic  Law  and  the  Rate  of  Wages. — ' 
Throughout  the  first  three-quarters  of  the  Nine- 
teenth century  political  economy  was  committed  to 
the  theory  that  the  rate  of  wages  was  determined  by 
forces  beyond  the  immediate  control  of  either 
laborer  or  capitalist.^  Wages,  it  was  said,  are  paid 
out  of  the  fund  of  capital  that  has  been  saved  from 
the  product  of  the  past.  The  amount  of  this  wage- 
fund  at  any  time  was  regarded  as  absolutely  pre- 
determined, and  consequently  not  variable  by  agree- 
ment between  the  parties  to  the  wage-contract.  If 
any  section  of  the  laborers  of  a  country  succeeded 
in  raising  their  wages  some  other  section  or  sections 
would  necessarily  have  their  remuneration  lowered. 
The  general  rate  of  wages  was  therefore  fixed  by 
an  economic  law  that  was  as  little  subject  to  the  wills 
and  efforts  of  men  as  the  law  of  gravitation.     It 

*  Sidgwick,  "Principles  of  Political  Economy,"  p.  504. 

•  See  chapter  on  "The  Verdict  of  the  Economists"  in 
Webb's  "Industrial  Democracy." 

6 


AGAINST    A    LIVING    WAGE 

was  consequently  no  more  immoral  than  the  action 
of  the  tides. 

Although  the  wage-fund  theory  is  no  longer  held, 
either  by  economists  or  by  intelligent  men  generally, 
an  equally  irrational  belief  in  the  power  of  econom- 
ic laws  to  prevent  any  lasting  modification  in  the 
rates  of  wages  by  human  action,  seems  to  retain  a 
considerable  body  of  adherents.  It  is  cherished  for 
the  most  part  by  men  who  have  a  personal  interest 
in  keeping  wages  low,  or  whose  mental  horizon  is 
circumscribed  by  limitations  of  personal  experience, 
education,  intellect  or  will.  In  their  opinion,  the 
most  convincing  reply  that  can  be  made  to  the  de- 
mand that  the  wage-contract  be  moralized,  seems  to 
be  the  assertion  that  the  rate  of  wages  is  fixed  by 
economic  law.  Is  the  assumption  valid  ?  and  if  so 
does  the  inference  really  follow  ? 

According  to  Marshall,  an  economic  law  "is  a 
statement  that  a  certain  course  of  action  may  be 
expected  under  certain  conditions  from  the  mem- 
bers of  an  industrial  group."'-  Hence  a  particular 
economic  law  merely  declares  that,  given  certain 
external  conditions,  men  may  be  expected  to  per- 
form such  and  such  economic  actions.  It  does  not 
say  that  they  will  act  thus  in  all  conditions,  nor 
does  it  specify  how  frequently  the  assumed  con- 
ditions will  be  present  in  actual  life.  For  example, 
the  law  which  causes  the  workers  in  the  Southern 
cotton  mills  to  be  so  poorly  paid  would  not  con- 
tinue to  operate  there  in  changed  conditions,  and 

^  "Principles  of  Economics,"  Book  I,  ch.  VII.  Cf,  Ritchie, 
"Darwin  and  Hegel,"  ch.  V ;  Keynes,  "Scope  and  Method  of 
Political  Economy,"  ch,  VII. 

7 


A    LIVING    WAGE 

the  existing  conditions  differ  from  those  that  obtain 
in  the  mills  of  Massachusetts.  In  the  words  of 
Marshall,  "economic  laws  are  applicable  to  a  very 
narrow  range  of  circumstances,  which  happen  to 
exist  together  at  one  particular  place  and  time,  but 
quickly  pass  away."  They  are  consequently  quite 
different  from  the  laws  of  mathematics,  which  are 
absolute  and  universal.  The  sum  of  the  angles  of 
a  triangle  will  equal  two  right  angles  always  and 
everywhere;  but  the  law  that  an  increase  in  the 
supply  of  labor  lowers  wages,  will  not  produce  the 
same  effect  among  organized  as  among  unorganized 
workingmen. 

The  question  whether  the  rate  of  wages  is  fixed 
by  economic  law  is  chiefly  a  question  of  language. 
The  affirmation  is  in  a  sense  true,  but  it  is  not  a 
very  important  or  a  very  illuminating  truth.  At 
any  rate,  the  inference  drawn  from  it — that  wages 
cannot  be  modified  by  human  effort — is  utterly  in- 
valid, and  indicates  a  complete  misunderstanding 
of  the  character  of  economic  laws.  For  the  laws 
are  operative  only  in  certain  conditions,  are  de- 
scriptions of  what  is  likely  to  happen  in  certain  con- 
ditions, and  are  consequently  dependent  upon  con- 
ditions. But  the  conditions  themselves — especially 
in  the  field  of  distribution — are  in  large  measure 
under  the  control  of  men.  Thus,  it  is  an  economic 
law  that  in  a  competitive  regime  wages  are  regulated 
by  the  inter-action  of  supply  and  demand,  but  these 
factors  are  partly  determined  by  the  wills  of  the 
buyers  and  sellers  of  labor.  Supply  will  be  re- 
stricted by  a  combination  of  laborers;  demand,  by 

8 


AGAINST    A    LIVING    WAGE 

a  combination  of  employers.  Some  of  the  dog- 
matic assertions  made  concerning  the  inflexibihty  of 
economic  laws  imply  the  notion  that  the  latter  are 
like  the  edicts  of  an  all-powerful  despot;  whereas 
the  simple  fact  is  that  they  are  to  a  considerable  ex- 
tent moulded  by  the  human  beings  whom  they  affect. 
A  strong  Labor  Union  might  meet  the  objection  of 
the  employer,  that  efforts  to  get  more  pay  must 
prove  futile,  since  wages  are  fixed  by  economic 
law,  with  the  declaration:  "Yes,  but  we  will  help 
to  make  the  law." 

The  scope  of  economic  laws  is  further  restricted 
by  the  fact  that  they  describe,  not  what  men  must 
do,  but  what  they  may  be  expected  to  do.  Herein 
they  differ  from  the  laws  of  physical  nature,  which 
admit  of  no  exception  in  the  conditions  to  which 
they  apply.  The  laws  of  economics  are  not  con- 
cerned with  purely  physical  forces,  which  operate 
uniformly,  blindly  and  necessarily,  but  with  human 
actions,  and  these  are  free.  Hence,  even  where  all 
the  external  conditions  are  suitable,  a  particular 
economic  law  may  not  work  out  its  normal  and 
expected  effect.  For  example,  the  condition  of 
supply  and  demand  in  a  labor  market  may  call  for 
a  reduction  in  wages,  yet  a  generous  employer  may 
refrain  from  taking  advantage  of  favorable  con- 
ditions, may  do  otherwise  than  he  is  expected  to  do, 
and  allow  wages  to  remain  at  the  present  level.  In 
a  word,  economic  laws  describe  uniform  tendencies 
rather  than  uniform  modes  of  human  action. 

Indeed,  the  custom  of  speaking  of  economic  laws 
as  producing,  or  tending  to  produce,  certain  effects 

9 


A    LIVING    WAGE 

is  confusing  and  ought  to  be  avoided/  Subjective- 
ly, they  are  merely  statements  of  uniformity;  ob- 
jectively, they  are  relations  of  uniformity.  The 
element  of  compulsion  or  causality  behind  this 
uniformity  is  contained  in  certain  physical,  social 
and  psychical  forces.  All  of  these  can,  to  a  greater 
or  less  extent,  be  counter-acted  by  forces  within  the 
control  of  man.  In  any  concrete  situation  it  is  the 
comparative  strength  of  the  two  sets  of  forces  that 
decides  the  kind  of  economic  action  that  will  be  pro- 
duced. Whether  any  class  of  underpaid  laborers 
must  continue  to  receive  the  meagre  wages  that  the 
system  of  unlimited  bargaining  now  assigns  to  them, 
depends  upon  whether  the  economic  forces  that  pro- 
duce this  result  can  be  overcome  by  forces  working 
in  the  opposite  direction.  The  question  has  no  real 
relation  to  the  abstract  bogey  that  is  sometimes 
appealed  to  in  the  name  of  economic  law. 

III.  The  Practical  Teaching  of  the  Econo- 
mists.— There  is  nothing,  consequently,  in  the 
nature  of  economic  laws  to  render  existing  rates  of 
wages  necessary,  or  the  unrestricted  use  of  bargain- 
ing power  morally  legitimate.  Let  us  now  see  what 
warrant  there  is  for  the  statement  that  economic 
writers  have  regarded  a  contract  made  under  com- 
petitive conditions  as  just,  and  what  value  is  to  be 
attached  to  their  pronouncements  in  this  matter. 
In  general,  their  views  of  the  ethical  aspects  of 
economic  facts  ought  to  have  special  weight  be- 
cause of  their  superior  knowledge  of  the  facts,  and 

^  Cf.  Bonar,  "Philosophy  and  Political  Economy,"  pp.  194- 
196. 

10 


AGAINST    A    LIVING    WAGE 

their  superior  facilities  for  applying  ethical  prin- 
ciples. The  authority  attaching  to  their  opinions 
on  the  morality  of  unlimited  free  contract  can  be 
overcome  only  through  an  examination  of  the  logical 
process  by  which  they  reached  their  conclusions. 

The  assertion  is  sometimes  made  that  economists 
have  laid  down  no  ethical  doctrines  of  any  kind,  that 
their  province  is  merely  that  of  positive  fact,  and 
their  work  that  of  observation,  analysis  and  in- 
duction. The  best  reply  to  this  statement  is  an  ap- 
peal to  the  facts  of  history.  "While  affecting  the 
reserved  and  serious  air  of  students,  political  econo- 
mists have  at  all  times  been  found  brawling  in  the 
market  place."^  This  is  especially  true  of  the 
"classical"  or  "orthodox"  school  of  economists,  who 
held  undisputed  sway  in  England  during  the  first 
half  of  the  nineteenth  century.  With  the  great 
majority  of  these,  says  Edward  Cannan,  "practical 
aims  were  paramount  and  the  advancement  of 
science  secondary."-  As  a  rule  they  were  men  of 
strong  moral  convictions,  and,  of  course,  advocated 
no  practical  policy  that  in  their  view  would  be  at  va- 
riance with  the  right.  On  the  contrary,  they  taught 
more  or  less  explicitly  that  the  measures  which  they 
favored — notably,  unlimited  freedoin  of  competition 
and  contract — would  naturally  and  automatically 
bring  about  a  regime  of  social  justice.  Professor 
Sidgwick,  who  cannot  be  accused  of  unfriendliness 
toward  the  traditional  political  economy,  tells  us  that 
"the  teaching  of  political  economists  has  generally 

^  Toynbee,  "Industrial  Revolution,"  p.  25. 
'"Production     and     Distribution,"     p.     384.     Cf.     Hobson, 
"John  Ruskin,  Social  Reformer,"  p.  99. 

II 


A    LIVING    WAGE 

pointed  to  the  conclusion  that  a  free  exchange,  with- 
out fraud  or  coercion,  is  also  a  fair  exchange."^  The 
logic  of  their  teaching,  therefore,  has  been  that 
wages  freely  bargained  for  would  be  just  wages. 
What  were  the  reasons  that  led  them  to  hold  and 
promulgate  this  theory? 

The  political  economy  of  Adam  Smith  was  based 
partly  on  a  priori  assumptions  and  partly  on  induc- 
tion.^ The  a  priori  principles  that  he  assumed  as 
valid  and  that  did  most  to  give  his  system  its  dis- 
tinctive character  were  (a)  the  philosophical  doc- 
trine of  an  order,  or  law,  of  nature  in  favor  of  in- 
dividual freedom,  and  (b)  the  theological  doctrine 
of  an  all-wise  Being  who  will  "maintain  at  all  times 
the  greatest  possible  amount  of  happiness."  ^  The 
idea  of  a  law  of  nature  came  to  him  principally  from 
the  Physiocrats  and  the  political  doctrinaires  who 
flourished  immediately  before  the  French  Revolu- 
tion; the  ideal  to  which  it  pointed,  individual  free- 
dom, was  the  dominant  aspiration  of  his  age.  The 
order  of  nature  meant  that  system  of  relations  be- 
tween man  and  man  which  had  obtained  or  would 
obtain  in  a  state  of  nature.  The  lazv  of  nature,  con- 
sequently, required  that  political  institutions  and 
restraints  be  reduced  to  a  minimum.     This  being 

^Article  on  "Political  Economy  and  Ethics"  in  Palgrave's 
Dictionary. 

'  See  Ingram,  "History  of  Political  Economy,"  pp.  89-93  '> 
Cohn,  "History  of  Political  Economy,"  chapter  on  Adam 
Smith ;  Cliffe-Leslie,  "Essays  in  Political  and  Moral  Phil- 
osophy," chapter  on  Adam  Smith ;  Toynbee,  "Industrial 
Revolution,"  pp.  11-26;  Sidgwick,  "Principles  of  Political 
Economy,"  pp.  19,  20 ;  Bonar,  "Philosophy  and  Political 
Economy,"  chapter  on  Adam  Smith  ;  Ely,  "The  Evolution  of 
Industrial   Society."  chapter  on  "Industrial  Liberty." 

•"Theory  of  Moral  Sentiments,"  Part  VI,  sec.  II,  ch.  III. 
12 


AGAINST    A    LIVING    WAGE 

accomplished,  the  equahty  of  men,  which  also  was 
a  part  of  the  order  of  nature,  would  secure  for  them 
the  greatest  measure  of  well-being.^  Unlimited  in- 
dividual freedom  was  the  practical  ideal  of  those 
"nature  philosophers"  who  exercised  so  profound 
an  influence  upon  Adam  Smith.  It  was,  indeed,  the 
ideal  of  the  age.  Personal  and  political  liberty  was 
preached  and  longed  for  in  England,  France  and 
America,  as  the  one  adequate  remedy  for  the  social 
ills  then  existing.  Adam  Smith  sought  to  have  il 
applied  to  industry.  Every  page  of  his  writings, 
says  Toynbee,  "is  illumined  by  one  passion,  the 
passion  for  freedom."  The  supreme  need  of  the 
hour,  to  his  mind,  was  the  removal  of  those  petty 
public  and  quasi-public  restrictions  that  hindered 
in  the  industrial  world  freedom  of  movement  and 
freedom  of  contact.  Abolish  these,  and  the  laborers 
would  of  themselves  be  able  to  realize  their  natural 
economic  equality  and  their  longed-for  economic 
prosperity.  "All  systems  either  of  preference  or 
restraint,"  he  declared  in  a  passage  that  has  become 
famous,  "being  thus  completely  taken  away,  the  ob- 
vious and  simple  system  of  natural  liberty  estab- 
lishes itself  of  its  own  accord."  ^ 

It  is  surprising  that  Adam  Smith,  whose  work 
abounds  with  proofs  of  his  ability  to  observe  facts 
accurately,  could  enunciate  a  principle  so  contrary 
to  the  fundamental  facts  of  human  nature  and  hu- 
man conduct.     Then  as  now,  it  must  have  seemed 

*  W.  S.  Lilly's  interesting  volume,  "A  Century  of  Revolu- 
tion," contains  a  thorough,  though  severe,  criticism  of  the 
Revolutionary  assumptions  of  liberty  and  equality. 

*  "Wealth  of  Nations,"  Book  IV,  ch.  IX,  final  paragraph. 

13 


A    LIVING    WAGE 

clear  that  the  legal  power  to  enter  into  contracts  is 
not  sufficient  to  obtain  for  men  the  conditions 
of  well-being.  Freedom  from  physical  and  politic- 
al coercion  does  not  of  itself  render  men  truly  free 
and  equal  in  bargaining.  The  explanation  seems  to 
be  found  in  Smith's  second  a  priori  principle,  which, 
as  so  frequently  happens  with  preconceived  theories, 
prevented  him  from  seeing  conditions  as  they  ac- 
tually were.  This  was  the  assumption  of  the  all- 
pervading  beneficence  of  the  Author  of  Nature. 
Though  man  is  by  nature  essentially  selfish  and  aims 
only  at  his  private  gain,  he  is  led  by  an  "invisible 
hand"  to  promote  the  welfare  of  all.  His  most  self- 
ish acts  redound,  at  least  in  the  long  run,  to  the 
common  good.  Hence  both  individual  and  social 
prosperity  and  justice  are  best  secured  and  con- 
served by  allowing  each  to  seek  his  own  interests 
in  his  own  way,  by  setting  up  the  system  of  com- 
plete liberty,  which  is  founded  on  the  constitution 
of  nature  and  the  benevolent  designs  of  nature's 
God. 

These  two  assumptions  of  the  supreme  value  of 
individual  Hberty,  and  the  sufficiency  of  enlightened 
self-interest,  were  adopted  in  substance  by  all  the 
great  economists  of  England  down  to  the  middle  of 
the  nineteenth  century.  Most  of  them,  indeed, 
cared  little  or  nothing  for — probably  knew  little  of 
— the  philosophical  and  theological  prepossessions 
that  underlay  these  theories  of  Adam  Smith,  but 
they  had  no  hesitation  in  advocating  as  the  correct 
principles  of  industrial  action,  abstention  from  com- 
bination and  regulation,  unlimited  competition,  and 

14 


AGAINST    A    LIVING    WAGE 

the  fullest  individual  liberty.^  They  did  not,  how- 
ever, preach  competition  and  freedom  of  contract 
as  invariable  laws,  to  be  disregarded  only  under  the 
greatest  peril ;  that  fault  was  committed  by  the  pop- 
ular expounders  of  political  economy,  chiefly  jour- 
nalists and  politicians.-  They  did  not  explicitly 
contend  that  wages  fixed  by  bargaining  in  competi- 
tive conditions  would  in  every  case  be  just.  Indeed, 
their  primary  aim  was  not  with  distribution  at  all. 
Professor  Sidgwick  says  that  Adam  Smith  and  his 
followers  sought  before  all  else  the  improvement  of 
production.^  The  question  with  them  was  how  to 
make  the  national  product  as  great  as  possible  at  a 
minimum  of  cost.  And  the  answer  seemed  to  them 
to  lie  in  the  one  word,  competition.  That  the  ex- 
isting inequalities  were  far  from  ideal,  they  were 
well  aware;  but  they  thought  that  the  injury  re- 
sulting to  production  from  any  interference  with 
competition  would  more  than  off-set  the  improve- 
ment in  distribution.^  They  made  an  unquestioning 
act  of  faith  in  the  beneficent  and  leveling  influence 
of  competition.  "  Unrestricted  freedom  of  action 
and  contract  would  tend  to  reduce  the  actually  in- 
evitable inequality  of  economic  opportunities  to  the 
lowest  attainable  minimum."  ^  With  inequality  of 
opportunity  at  a  minimum,  the  prices  of  things,  in- 

' Sidgwick,  "Principles,"  p.  399;  KejTies,  op.  cit.,  pp.  70-74. 
John  Rae  seems  to  be  almost  alone  in  opposing  this  view  con- 
cerning the  classical  school  of  economists:  "Contemporary 
Socialism,"  pp.  345-374,  2d  edition. 

^  Cliffe-Leslie,  op.  cit.,  p.  21. 

^Op.  cit.,  pp.  24,  396. 

*SjdgT^■ick,  op.  cit.,  pp.  22,  400. 

^Idem,  p.  506. 

15 


A    LIVING    WAGE 

eluding  the  price  of  labor,  would  correspond  as  close- 
ly to  the  requirements  of  justice  as  could  be  expected 
in  a  world  inhabited  by  human  beings.  Now,  this  the- 
ory of  the  equalizing  force  of  unfettered  competition 
and  unlimited  freedom  of  contract,  together  with  a 
very  inadequate  observation  of  the  facts  of  indus- 
trial life,  formed  the  basis  of  whatever  claims  the 
older  economists  had  to  be  regarded  as  judges  of  the 
morality  of  wages  fixed  by  the  method  of  unlimited 
bargaining.  That  their  theory  was  false  and  their 
study  of  facts  one-sided,^  was  abundantly  proved  by 
the  industrial  experience  of  the  land  in  which  the 
theory  was  most  widely  preached  and  most  thor- 
oughly tested.  The  rise  of  the  factory  system  in 
England  and  the  introduction  of  the  policy  of 
laissez-faire  were,  indeed,  followed  by  a  remarkable 
increase  in  the  production  of  wealth;  but  inequal- 
ities of  opportunity  were  not  reduced  to  a  minimum ; 
the  remuneration  of  labor  did  not  tend  to  conform 
to  a  measure  of  substantial  justice.  Nearly  the 
whole  of  the  increase  in  wealth  went  to  the  newly- 
made  capitalists,^  while  the  wages  received  by  the 
laborers  were  barely  sufficient  to  keep  them  alive. 
The  leveling  influence  of  competition  was  confined 
to  the  ranks  of  the  workingmen,  and  its  tendency 
was  invariably  downward.  Starvation  wages  com- 
pelled husbands  and  fathers  to  send  their  wives  and 
children  into  the  mills,  with  the  result  that  their 

*  Regarding  the  incomplete  inductions  of  the  classical  econ- 
omists, see :  Marshall,  "Principles,"  Book  I,  eh.  IV,  par.  6 ; 
Hobson,  "The  Social  Problem,"  pp.  28-30 ;  Ruskin,  "Unto 
This  Last."  essay   i. 

*  Gibbins,  "Industry  in  England,"  p.  381. 

16 


AGAINST    A    LIVING    WAGE 

own  pay  was  still  further  reduced  through  this  un- 
natural competition  between  husband  and  wife,  be- 
tween father  and  child.  To  such  an  extent  did 
women  and  girls  supersede  men  in  the  manufactur- 
ing industry  that  the  latter  frequently  were  obliged 
to  remain  at  home  to  attend  to  the  duties  of  the 
household.  Children  from  the  workhouses  were 
impressed  into  the  factories  under  a  system  of  ap- 
prenticeship that  rendered  their  existence  "literally 
and  without  exaggeration  that  of  slaves."  In  a 
word,  "the  obvious  and  simple  system  of  natural 
liberty"  advocated  by  Adam  Smith  and  his  suc- 
cessors, brought,  instead  of  a  regime  of  justice,  a 
period  of  horror  that  is  known  in  economic  history 
as  the  period  of  English  Wage-Slavery.^ 

That  these  beliefs  and  hopes  of  the  classical 
economists  concerning  the  ethical  efficacy  of  com- 
petition were  utterly  mistaken,  is  well  understood 
by  the  economists  of  to-day.  The  latter  realize 
very  clearly  that  in  some  lines  of  production,  at  any 
rate,  the  natural  and  normal  result  of  the  competi- 
tive system  is  to  have  "our  work  done  by  a  large 
number  of  low-grade  laborers,  instead  of  by  a  com- 
paratively small  number  of  high-grade  laborers."^ 
Whole  classes  of  laborers,  for  example,  those  em- 
ployed in  sweat  shops,  are  "'underpaid,  underfed 

^  For  a  general  description  of  this  period,  see :  Gibbins,  op. 
cit.  pp.  381-406;  "Alfred,"  "History  of  the  Factory  Move- 
ment" ;  Taylor,  "Modern  Factory  System" ;  Engels,  "Condi- 
tion of  the  Working  Classes  in  England" ;  Carlyle,  "Past  and 
Present,"  Books  I  and  III. 

^  Hadley,  "Economics,"  sec.  361.  Cf.  Lavasseur,  "The 
American  Workman,"  p.  449  ;  and  in  particular,  Walker,  "The 
Vv'^ages  Question,"  chapter  on  "The  Degradation  of  Labor." 

2  17 


A    LIVING    WAGE 

and  undersupplied  with  everything  which  contrib- 
utes to  civiUzed  Hfe."  Contemporary  economists 
feel  and  acknowledge  that  conditions  such  as  these 
are  at  variance  with  the  requirements  of  justice. 
They  are  consequently  desirous  that  competition 
should  be  modified  in  various  ways:  by  custom, 
philanthropy,  labor  organizations  and  moderate  leg- 
islative action.  Beyond  this  the  majority  of  them 
seem  unwilling  to  go.  In  so  far  as  they  touch  the 
ethical  aspect  of  the  matter  at  all,  they  seem  to  hold 
that  the  system  of  bargaining  for  wages  satisfies  the 
demands  of  justice  as  fully  as  is  at  present  practic- 
able. The  question  of  replacing  the  practice  of  un- 
limited bargaining  with  a  definitely  moral  standard 
of  wages  is  discussed  not  so  much  from  the  stand- 
point of  ethics,  as  from  that  of  feasibility.  This  is 
especially  true  of  their  attitude,  in  so  far  as  they 
have  any,  toward  the  standard  of  a  Livmg  Wage. 
Their  contention  seems  to  be  that  even  if  this  stand- 
ard could  be  established  in  practice,  for  example, 
by  legislation,  it  would  be  productive  of  more  social 
harm  than  good.  Professor  Smart  rejects  the 
Living  Wage,  and  defends  the  present  method  of 
unlimited  bargaining  on  the  ground  that  no  more 
satisfactory  plan  is  workable  outside  of  socialism.* 
The  existing  freedom  of  contract  secures  for  all  "a. 
certain  rough  kind  of  justice."  President  Hadley 
likewise  declares  against  the  Living  Wage  as  im- 
practicable, and  accepts  the  sliding  scale  as  the  fair- 

^  "Studies   in  Economics,"  chapter  on   "A   Living  Wage"; 
and  "Distribution  of  Income,"  ch.  XXVIII. 

i8 


AGAINST    A    LIVING    WAGE 

est  method  of  determining  wages  that  has  yet  been 
proposed. ^ 

The  position  of  the  two  writers  just  named  prob- 
ably reflects  the  general  views  of  all  present  day 
economists  except  those  who  profess  to  give  more 
than  usual  attention  to  the  moral  aspects  of  in- 
dustry. These  naturally  lay  greater  stress  on  the 
immorality  of  unlimited  bargaining,  and  pay  less 
attention  to  the  difficulties  in  the  way  of  a  better 
method.  ^ 

IV.  The  Attitude  of  Nineteenth  Century  Leg- 
islation Toward  Unlimited  Bargaining. — Since  the 
beginning  of  the  Nineteenth  century  the  laws  of 
England  have  allowed  the  fullest  freedom  of  con- 
tract in  the  determination  of  the  wages  to  be  paid 
for  all  except  government  work.  England  is  men- 
tioned particularly  because  the  history  of  her  legis- 
lative attitude  toward  the  wage-contract  during  the 
last  century  is  typical  of  the  greater  part  of  Europe 
and  of  the  whole  of  North  America,  and  because 
she  was  the  first  to  adopt  the  policy  of  non-regula- 
tion. The  causes  of  the  changed  attitude  of  the 
law  are  very  much  the  same  as  those  which  induced 
the  economists  to  advocate  unlimited  competition 
and  freedom  of  contract.  The  Industrial  Revolu- 
tion had  rendered  the  old  regulations  of  industry 
inadequate  and  harmful,  and  the  dominant  political 
ideal  of  the  day  was  wider  liberty  for  the  individual. 
Thus  the  champions  of  non-interference  with  the 

^"Economics,"  sees.  404-406.  Cf.  Leroy-Beaulieu,  "Traite 
theorique  et  pratique,"  vol.  ii,  p.  484,  sq. 

*  Cf.  Ely,  "Outlines  of  Economics,"  p.  206,  ist  edition; 
Hobson,  "The  Social  Problem,"  chaps.  II,  VII. 

19 


A    LIVING    WAGE 

industrial  activity  of  the  British  subject  were  able 
to  enforce  their  theoretical  arguments  by  pointing 
to  the  disastrous  results  of  the  opposite  policy. 
Prominent  among  these  champions  were  the  econ- 
omists, whose  influence  upon  English  legislation 
during  the  first  half  of  the  Nineteenth  century  has 
not  been  equalled  in  any  other  time  or  country. 
Ricardo  alone,  we  are  told  by  Toynbee,  revolution- 
ized the  economic  thought  of  the  British  Parliament 
during  his  brief  stay  in  that  body.  Again,  the  mid- 
dle classes,  who  were  rapidly  gaining  in  wealth  and 
political  power,  urged  the  laissez-faire  policy  be- 
cause they  felt  that  "with  freedom  they  were  more 
than  a  match  for  all  competitors."  The  effect  of 
these  combined  forces  was  to  restrict  state  regula- 
tion of  industrial  life  to  the  narrowest  proportions 
known  to  history. 

The  causes  of  the  regime  of  non-interference  in 
America  are  included  among  those  just  described. 
The  influence  of  the  economists  was  not  as  great  as 
in  England ;  but  the  cult  of  individual  freedom,  and 
the  self-confidence  and  self-assertion  of  the  middle 
classes,  were  for  a  long  period  the  dominant  forces 
in  shaping,  both  positively  and  negatively,  the  course 
of  legislation  regarding  industry. 

Obviously,  the  attitude  of  the  civil  law  toward 
the  wage-contract,  or  toward  any  other  human 
action  or  institution,  is  not  per  se  a  criterion  of  the 
morally  good.  The  ordinances  of  legislatures  are 
not  always  in  accord  with  the  principles  of  right 
and  justice.  The  fact  that  the  laws  of  a  country 
allow  its  citizens  by  means  of  free  contract  to  depress 

20 


AGAINST    A    LIVING    WAGE 

wages  to  the  starvation  level,  or  enhance  them  be- 
yond the  limits  of  extortion,  does  not  make  the 
transaction  just;  but,  since  legislatures  should,  and 
generally  speaking  do,  endeavor  to  promote  just 
dealings  in  the  more  important  social  relations, 
there  arises  a  presumption  in  favor  of  any  institu- 
tion that  the  law  sanctions  and  protects. 

In  the  present  case  the  presumption  vanishes  as 
soon  as  we  examine  the  causes  of  the  legislation. 
As  above  described,  these  causes  may  be  reduced  to 
three :  the  insufficiency  of  the  old  restrictions ;  the 
fancied  sufficiency  of  individual  freedom;  and  the 
selfishness  of  the  middle  classes.  The  first  afforded 
a  good  reason  for  such  new  legislation  as  would  be 
appropriate  to  the  new  conditions  of  industry,  but 
not  for  the  anarchical  policy  of  non-interference; 
the  second  was  a  hypothesis  that  has  been  utterly 
discredited  by  the  subsequent  history  of  industrial 
development, — individual  freedom  has  not  brought 
either  economic  equality  or  economic  justice ;  while 
the  third  should  have  been  checked,  instead  of 
fostered,  by  legislation. 

The  presumptions  in  favor  of  the  existing  method 
of  fixing  wages  and  against  the  principle  of  a  Living 
Wage  which  are  drawn  from  the  teaching  of  polit- 
ical economy  and  the  attitude  of  the  law,  disappear, 
therefore,  when  we  realize  the  reasons  upon  which 
this  teaching  and  this  attitude  were  based.  Eco- 
nomic laws  are  not  inexorable,  are  not  independent 
of  the  wills  of  the  men  whose  actions  they  describe, 
do  not  compel  wages  to  be  adjusted  by  an  unlimited 
use  of  the  economic  strength  of  the  bargainers,  and 

21 


A    LIVING    WAGE 

do  not  render  existing  rates  of  wages  just.  The 
practical  recommendations  of  the  economists  and 
the  ordinances  of  the  legislators  can  be  traced  to 
false  principles,  false  reasoning,  incomplete  analy- 
sis of  facts,  and  the  selfishness  of  the  dominant  in- 
dustrial class.  Consequently  the  doctrine  of  a  Liv- 
ing Wage  cannot  be  refuted  or  put  in  peril  by  any 
mere  appeal  to  economic  or  legal  authority.  The 
contention  of  those  economists  of  our  own  time  who 
maintain  that  a  Living  Wage  is  impossible  of  appli- 
cation will  be  examined  later.  In  the  meantime  it 
will,  perhaps,  not  be  unprofitable  to  review  briefly 
the  chief  authorities,  contemporary  and  historical, 
that  are  against  the  method  of  unrestricted  bargain- 
ing and  in  favor  of  a  professedly  ethical  standard. 


22 


CHAPTER  II 


Some   Authorities    in    Favor   of   an    Ethical 
Standard  for  Fixing  Wages. 

Wages  in  England  formerly  regulated  by  law.  Quasi-le- 
gal regulation  through  the  gilds,  custom,  and  the  regula- 
tion of  the  price  of  goods.  Teaching  of  Catholic  authorities 
on  the  right  to  a  livelihood  and  on  just  price.  And  on  the 
customary  rate  of  wages.  Teaching  of  Leo  XIII  on  a  Liv- 
ing Wage.  Was  not  the  first  to  declare  this  principle.  At- 
titude of  representative  Protestants.  Contemporary  opinion 
in  favor  of  the  Living  Wage  principle.  Attitude  of  the  lab- 
or unions.  Some  instances  of  a  legal  minimum  wage.  Con- 
clusion that  the  weight  of  opinion  is  against  the  method  of 
unlimited  bargaining. 

I.     Legislation  Concerning  Wages. — The  policy 

of  indifference  which  nearly  all  governments  pursue 
with  reference  to  the  wage-contract  to-day  has  not 
prevailed  always.  From  the  year  1349  to  the  year 
1563  the  remuneration  of  the  unskilled  laborers  of 
England,  both  in  town  and  country,  was  regulated 
by  law,  by  the  various  "Statutes  of  Laborers"  that 
were  re-enacted  or  amended  by  nearly  every  mon- 
arch that  reigned  during  those  two  centuries.  In 
the  last  named  year  was  passed  the  famous  "Statute 
of  Elizabeth,"  which  applied  not  only  to  the  un- 
skilled workers,  but  "to  the  greater  part  of  the  in- 

23 


A    LIVING    WAGE 

dustry  of  the  period."^  It  continued  on  the  statute 
oooks  down  to  1813,  when,  at  the  bidding  of  capital- 
ists  and  poHtical  economists,  but  against  the  protest 
of  the  laboring  class,  it  was  "peremptorily  repealed." 
A  great  economic  historian  has  contended  that  from 
first  to  last  these  laws  regulating  wages  were  de- 
signed to,  and  actually  did,  benefit  the  employer  at 
the  expense  of  the  workingman.  The  first  of  them 
was,  indeed,  framed  for  the  express  purpose  of  re- 
ducing the  unusually  high  wages  which  prevailed 
in  consequence  of  the  Black  Death  of  1348.  In 
general,  the  legal  rate  of  wages  was  for  a  long  time 
a  maximum  which  both  master  and  man  were  for- 
bidden to  exceed,  and  the  "Statute  of  Elizabeth" 
was  almost  invariably  administered  unfavorably  to 
the  laborer.  According  to  the  provisions  of  this 
act,  wages  were  fixed  by  the  justices  of  the  peace, 
who  were  in  most  cases  employers  or  men  friendly 
to  the  employing  class.  This  policy,  together  with 
the  disastrous  effects  of  the  debasement  of  the 
currency  and  the  confiscation  of  the  gild  lands  by 
Henry  VIII,  and  the  progressive  separation  of  the 
workers  from  their  little  plots  of  land  and  from 
their  rights  over  the  Common,  had  no  doubt  gone 
very  far  toward  making  "low  wages  and  famine 
wages  traditional."  ^  And  yet  we  find  that  again  and 
again  during  the  eighteenth  century  the  working- 
men  appealed  to  the  justices  and  to  the  House  of 
Commons  to  enforce  and  re-establish  the  legal  regu- 

^  Webb,  "History  of  Trade  Unionism,"  p.  42. 
'  Thorold   Rogers,   "The    Economic   Interpretation   of   His- 
tory," p.  43. 

24 


STANDARD    FOR    FIXING    WAGES 

lation  of  wages,  ^  However  this  may  be,  the  ques- 
tion that  concerns  us  now  is  not  whether  the  laws 
fixing  wages  were  favorable  to  the  laborers,  but 
whether  the  English  people  did  not  for  centuries  be- 
lieve that  wages  determined  by  free  contract  were 
not  necessarily  just.  That  they  believed  in  an  ob- 
jective standard  of  justice,  a  standard  independent 
of  the  terms  of  the  wage-agreement,  is  evident  from 
their  continued  efforts  to  regulate  the  remuneration 
of  labor  by  law.  ^ 

The  policy  of  legal  regulation  was  carried  out  not 
only  by  means  of  the  formal  enactments  just  de- 
scribed, but  also  through  the  rules  and  customs  of 
the  gilds.  During  a  considerable  part  of  the 
Middle  Ages  the  rates  of  wages  determined  by  the 
gilds  had  virtually  all  the  force  of  public  laws. 
There  was,  moreover,  an  indirect  regulation  through 
the  legal  or  quasi-legal  regulation  of  the  price 
of  goods.  If  a  gild  was  able  to  fix  wages  so 
effectively  that  no  one  ever  thought  of  departing 
from  them,  it  performed  the  essential  functions  of 
a  civil  legislator;  and  if  the  central  authority,  or 
the  municipality,  or  the  gild,  or  even  custom,  deter- 
mined the  price  of  goods  it  virtually  determined 
the  price  of  labor.  And  this  legal  supervision  of 
the  rewards  of  labor,  direct  or  indirect,  explicit  or 

^  Webb,  "History  of  Trade  Unionism,"  pp.  42-54. 

'A  detailed  account  of  the  different  "Statutes  of  Laborers" 
enacted  by  the  English  Parliament  will  be  found  in  Thorold 
Rogers  "Economic  Interpretation  of  History,"  ch.  II.  See  al- 
so articles,  "Government  Regulation  of  Industry,"  "Laissez- 
Faire,"  and  "Statute  of  Laborers,"  in  Palgrave's  Dictionary 
of  Political  Economy. 

'  See  Brants,  "  Theories  economiques  aux  xiiie  et  xi\'e  siecles," 
p.  201,  sq. 

25 


A    LIVING    WAGE 

virtual,  seems  to  have  prevailed  not  only  in  England 
but  throughout  Western  and  Southwestern  Europe 
during  the  whole  of  the  later  Middle  Ages,  The 
accepted  principle  of  medieval  society,  say  Sidney 
and  Beatrice  Webb,  was  that  some  kind  of  social 
organization  was  necessary  in  order  to  protect  the 
standard  of  life  of  the  workers,  and  to  prevent  their 
degradation.^  The  sense  of  solidarity,  mutual  de- 
pendence and  mutual  responsibility  among  the  mem- 
bers of  a  community,  the  conviction  that  the  indus- 
trial world  should  be  ordered  by  law,  rather  than 
left  to  individual  caprice  and  selfishness,  were  far 
more  prominent  in  the  thought  of  that  period  than 
they  are  to-day.  ^  Hence,  "every  sort  of  economic 
transaction  in  which  individual  self-interest  seemed 

to  lead  to  injustice "  was  regulated  "by  the 

general  principle  that  a  just  or  reasonable  price  only 
should  be  paid."^ 

II.  The  Teaching  of  Christian  Theological  and 
Ethical  Writers. — This  attitude  of  the  public  and 
of  legislators  was  the  result  of  Christian  conceptions 
of  fair  dealing,  and  of  the  widespread  influence  of 
the  Christian  Church,  Christianity  succeeded  in 
the  Middle  Ages  in  "moralizing  industrial  and 
commercial  conceptions  and  institutions,"  and  it 
impressed  men  "with  a  keen  sense  of  personal  re- 
sponsibility in  the  employment  of  secular  power  of 
every  kind."*     It  was  the  uniform  teaching  of  the 

^"History  of  Trade  Unionism,"  p.  19. 

'  Cf.  Gierke,  "Political  Theories  of  the  Middle  Age,"  p.  7. 
sq.,  translated  by  Maitland. 

'Ashley,  "English  Economic  History,"  vol.  i,  p.  181. 

*  Cunningham,  "Western  Civilization,"  vol.  ii,  pp.  104,  lOS. 

26 


JTANDARD    FOR    FIXING    WAGES 

Fathers  of  the  Church  and  of  the  medieval  theo- 
logians that  every  human  being  had  an  imperishable 
right  to  a  livelihood  from  the  common  bounty  of 
nature.  This  they  regarded  as  a  natural  right,  in- 
dependent of  and  superior  to  all  human  laws,  con- 
ventions and  institutions.  According  to  this  doc- 
trine, therefore,  the  laborer  was  endowed  with  an 
absolute  right  to  at  least  sufficient  remuneration 
to  maintain  his  life.  Moreover,  the  principle  that 
the  laborer  should  receive  just  wages  was  virtually 
contained  in  the  canonist  doctrine  of  just  price. 
The  theologians  and  canonists  held  that  every 
commodity  had  a  certain  fair  valuation,  or  just  price, 
which  was  independent  of  the  arbitrary  and  fortui- 
tous valuation  resulting  from  the  higgling  of  the 
market.^     The  just  price  in  any  market  being  deter- 

^The  somewhat  puzzling  doctrine  of  "just  price"  is  not 
always  understood  by  either  its  critics  or  its  defenders.  1  he 
former  sometimes  assert  that  it  was  based  on  an  incorrect 
analysis  of  the  phenomena  that  give  rise  to  commercial  values, 
individual  and  social.  This  is  a  complete  misconception  ;  for 
the  doctrine  in  question  was  not  an  attempt  to  explain  the 
actual,  but  to  describe  the  ideal.  Comparisons  instituted  be- 
tween it  and  modern  theories  of  value  are,  therefore,  entirely 
irrelevant.  A  theory  of  value  is  a  scientific  explanation  of 
the  ultimate  causes  of  the  values  that  prevail  or  tend  to  pre- 
vail in  a  regime  of  free  contract.  Now  the  medieval  writers 
concerned  themselves  very  little  with  this  question :  First,  be- 
cause values  and  prices  were  in  their  time  fixed  for  the  most 
part  by  law  or  by  custom  ;  and,  second,  because  their  main  pur- 
pose was  to  lay  down  rules  for  knowing  the  price  at  which  a 
thing  ought  to  sell,  not  to  tell  the  price  at  which  it  would  sell. 
Even  if  they  had  held,  as  some  modern  writers  have  asserted, 
that  the  just  price  of  a  commodity  was  something  strictly  in- 
trinsic— a  belief  that  cannot  be  correctly  attributed  to  any  one 
of  them — their  teaching  would  not  conflict  with  economic 
theories  of  value.  (Cf.  Cunningham,  "Western  Civilization," 
vol.  ii,  pp.  78-80.)  The  doctrine  of  just  price  may  sometimes 
have  been  associated  with  incorrect  views  of  industrial  life, 
but  all  competent  authorities  agree  that  it  was  a  fairly  sound 

27 


A    LIVING    WAGE 

mined  by  the  appraisement  of  the  general  pubHc,  it 
was  said  to  be  measured  by  the  "communis  aesti- 
matio."  To  ascertain  the  just  price  of  any  article, 
account  had  to  be  taken  of  its  general  utility,  scar- 
city and  cost  of  production.  The  last  element,  which 
in  the  Middle  Ages  was  chiefly  represented  by  labor 
expenditure,  was  regarded  as  the  most  important. 
When,  therefore,  the  medieval  theologians  and 
canonists  taught  that  a  just  price  should  be  paid  for 
every  commodity,  and  that  its  chief  determinant  was 
Iribor-cost,  they  virtually  insisted  that  the  laborer 
should  be  paid  just  wages.^ 

To  the  searcher  for  explicit  and  precise  rules  for 
determining  what  is  a  fair  remuneration  for  labor, 
the  medieval  writers  are,  indeed,  disappointing. 
St.  Thomas  Aquinas  says  that,  as  justice  demands 
that  a  fair  price  be  paid  for  a  material  commodity, 

attempt  to  define  the  equities  of  medieval  exchanges,  and  that 
it  was  tolerably  successful  in  practice. 

On  the  other  hand  over-zealous  apologists  of  the  doctrine 
have  tried  to  show  that  the  "communis  aestimatio,"  which  was 
held  to  be  the  proximate  criterion  of  just  price,  is  essentially 
the  same  as  that  complex  of  social  forces  that  fixes  present 
market  prices,  and  that  some  modern  writers  have  called  "the 
social  estimate."  The  resemblance  is  only  of  name.  The  com- 
mon estimate  of  which  the  canonists  spoke  was  a  conscious 
social  judgment  that  fixed  prices  beforehand,  and  was  ex- 
pressed chiefly  in  custom,  while  the  social  estimate  of  to-day 
is  in  reality  an  unconscious  resultant  of  the  higgling  of  the 
market,  and  finds  expression  only  in  market  price. 

For  a  complete  exposition  of  the  doctrine  of  just  price, 
with  abundant  citations  and  references,  see :  "LTdee  du  jviste 
prix,"  by  Henri  Garnier ;  and  "Allgemeine  Grundlagen  der 
Nationaloekonomie,"  ch.  XV,  by  Julius  Costa-Rosetti.  Brants 
in  the  work  already  cited,  chap.  V.  and  p.  193  ;  Ashley  in 
"Economic  History,"  vol.  i,  p.  134,  sq. ;  and  Cunningham  in 
"Growth  of  English  Industry,"  vol.  i,  p.  323,  sq.,  are  also  quite 
satisfactory. 

*  Cf .  Brants,  op.  cit.,  pp.  107-116. 
28 


STANDARD    FOR    FIXING    WAGES 

so  it  demands  that  a  fair  price  should  be  given  for 
human  labor.  ^  Other  writers  likewise  content 
themselves  with  the  general  declaration  that  wages 
should  be  in  accordance  with  justice.  Their  failure 
to  be  more  specific  seems  to  be  explained  by  the 
industrial  conditions  of  the  time.  During  the  great- 
er part  of  the  Middle  Ages  there  was,  properly 
speaking,  no  such  thing  as  a  wage  system ;  for  there 
was  no  class  of  laborers,  either  in  town  or  country, 
depending  solely  on  employers  to  whom  they  sold 
their  labor.  ^  The  master  craftsmen  in  the  towns 
and  the  men  who  tilled  the  soil  on  their  own  account, 
received  just  wages  if  they  received  a  just  price  for 
their  products.  Even  after  the  rise  of  a  distinct 
laboring  class — that  is,  men  who  could  never  hope 
to  become  master  craftsmen,  or  men  who  spent  the 
greater  part  of  their  time  in  the  service  of  the  lords 
of  the  domain — the  question  of  just  wages  was  not 
of  supreme  importance.  In  town  industries  the 
journeymen  were  quite  commonly  fed  and  lodged 
by  their  employers ;  ^  the  relations  between  masters 
and  journeymen  were  akin  to  those  existing  between 
father  and  sons ;  *  and  between  the  average  earnings 
of  the  two  classes  there  was  not  a  great  difference.  ^ 
Agricultural  laborers  usually  had  possession  of  a 
piece  of  ground,  to  the  cultivation  of  which  they 
^"Summa  Theologica,"  la.  2ae.,  q.  144,  a.i. 

*  Gibbins,  op.  cit.,  vol.  ii,  p.  loi  ;  Ashley,  op.  cit.,  vol.  ii,  p. 
loi  ;  Levasseur,  "Histoire  des  classes  ouvrieres  avant  1789," 
vol.  I,  p.  sg8. 

'Levasseur,  op.  cit.,  vol.  i,  p.  455  ;  Brants,  op.  cit.,  p.  123  ; 
Martin-Sainte-Leon,  "Histoire  des  corporations  des  metiers," 

p.   155. 

*  Ashley,  op.  cit.,  vol.  ii,  p.  103. 

'Levasseur,  op.  cit.,  vol.  i,  p.  313;  Brants,  op.  cit.,  p.  123. 
29 


A    LIVING    WAGE 

devoted  their  leisure  time,  and  from  which  they  ob- 
tained part  of  their  sustenance.  ^  These  conditions 
were  not,  indeed,  universal,  nor  did  they  always 
secure  for  the  laborer  a  reasonable  living,  but  they 
explain  sufficiently  the  failure  of  medieval  writers 
to  treat  specifically  the  question  of  just  wages. 

Later  on,  when  the  wage-earning  class  assumed 
greater  proportions,  we  find  the  ethics  of  their 
remuneration  explicitly  discussed  by  theological 
writers.  Molina,  De  Lugo,  and  Bonacina,  writing 
about  the  beginning  of  the  seventeenth  century, 
declare  that  in  general  that  wage  is  just  which  is 
customary  for  a  given  service  in  a  given  place.^  The 
two  first  mentioned  say  that  a  wage  insufficient  for 
the  subsistence  of  some  laborers,  will  nevertheless 
be  fair  when  there  are  many  who  willingly  sell  their 
services  for  that  amount.  We  are  told  that  numer- 
ous workers  do  accept  this  lower  wage,  either  be- 
cause they  have  other  sources  of  income,  or  because 
they  can  live  more  cheaply  than  fellow  members  of 
their  own  class.  From  the  context  it  would  seem 
that  both  Molina  and  De  Lugo  assume  that  the 
laborer  has  a  right  to  a  living  from  his  toil,  and  that 
their  chief  concern  in  the  passages  cited  is  with  cases 
in  which  the  circumstances  are  exceptional.  ^  At 
any  rate,  they  do  not  discuss  the  question  of  a  Liv- 
ing Wage  adequately  and  in  all  its  relations.  The 
only  general  standard  of  just  remuneration  that  they 

^  Gibbins,  op.  cit.,  p.  iii. 

*  Molina,  "De  Contractibus,"  disp.  506,  nos.  2,  3,  4 ;  De 
Lugo,  "De  Jure  et  Justitia,"  disp.  29,  no.  62  ;  Bonacina,  "De 
Contractibus,"  disp.  3,  q.   7. 

^  Cf.  Vermeersch,  "Quaestiones  de  Justitia,"  pp.  572,  573 ; 
Pettier,  "De  Jure  et  Justitia,"  pp.  234-241. 

30 


STANDARD    FOR    FIXING    WAGES 

lay  down  is  custom.  Whether  the  customary  wages 
of  those  days  compHed  with  the  requirements  of  a 
Living  Wage,  as  then  understood,  is  not  easily 
determined.  However,  since  wages  remained  sta- 
ble during  long  periods  of  time,  and  since  the  direct 
influence  of  religious  and  moral  teaching  on  eco- 
nomic life  was  very  considerable — much  greater 
than  at  present — it  may  well  be  that  the  essentials  of 
a  reasonable  wage  were  fairly  well  realized. 

From  the  time  of  the  writers  just  mentioned 
down  to  the  year  1891,  the  theological  and  canonist 
doctrine  on  the  ethics  of  wages  seems  to  have 
undergone  no  important  development.  The  old 
phrases  about  customary  wages  and  just  wages  are 
constantly  recurring.  A  curious  instance  of  this 
unprogressiveness  is  found  in  the  pages  of  the  canon- 
ist, Reiffenstuel,  one  of  the  ablest  authorities  on  the 
legislation  of  the  Church.  He  maintained  that  it  was 
wrong  for  an  employer  to  pay  a  laborer  less  than 
was  usual  in  similar  circumstances,  but  that  when 
the  usual  wage  was  paid  all  obligations  of  justice 
were  satisfied,  even  though  it  did  not  suffice  for  a 
livelihood.^  According  to  this  interpretation,  the 
"customary  wages"  of  the  medieval  theologians 
and  canonists  become  "current  wages,"  and  the 
"common  estimate"  of  just  wages  becomes  the  wa- 
ges that  men  actually  pay  in  the  strife  of  competitive 
bargaining.  What  was  in  the  minds  of  the  School- 
men a  conscious  moral  judgment  is  thus  converted 
into  an  unconscious  resultant  of  men's  efforts  to  buy 

*"Jus  Canonicum,"  lib.  Ill,  Decretal.,  tit.  XVIII,  nos.  108- 
114. 

31 


A    LIVING    WAGE 

cheap  and  sell  dear.  The  author's  principle  would 
justify  starvation  wages  if  these  were  common  to  a 
whole  class. 

In  the  year  1891,  the  late  Pope  Leo  XIII  formu- 
lated the  doctrine  of  a  minimum  Living  Wage  in 
his  celebrated  encyclical,  "Rerum  Novarum,"  better 
known  by  the  title,  "On  the  Condition  of  Labor." 
Its  most  important  passages  relative  to  the  present 
matter  are  the  following: 

"We  now  approach  a  subject  of  very  great  im- 
portance, and  one  on  which  if  extremes  are  to  be 
avoided  right  ideas  are  absolutely  necessary.  Wa- 
ges, we  are  told,  are  fixed  by  free  consent,  and  there- 
fore the  employer,  when  he  has  paid  what  was 
agreed  upon,  has  done  his  part  and  is  not  called  upon 
for  anything  further.  The  only  way,  it  is  said,  in 
which  injustice  could  happen  would  be  if  the  master 
refused  to  pay  the  whole  of  the  wages,  or  the  work- 
man would  not  complete  the  work  undertaken; 
when  this  happens  the  State  should  intervene  to  see 
that  each  obtains  his  own,  but  not  under  any  other 
circumstances. 

"This  mode  of  reasoning  is  by  no  means  convinc- 
ing to  a  fair  minded  man,  for  there  are  important 
considerations  which  it  leaves  out  of  view  altogeth- 
er. To  labor  is  to  exert  one's  self  for  the  sake  of 
procuring  what  is  necessary  for  the  purpose  of  life, 
and  most  of  all  for  self-preservation.  Tn  the  sweat 
of  thy  brow  thou  shalt  eat  bread.'  Therefore,  a 
man's  labor  has  two  notes  or  characters.  First  of 
all,  it  is  personal;  for  the  exertion  of  individual 
power  belongs  to  the  individual  who  puts  it  forth, 

32 


STANDARD    FOR    FIXING    WAGES 

employing  his  power  for  the  personal  profit  for 
which  it  was  given.  Secondly,  man's  labor  is  neces- 
sary; for  without  the  results  of  labor  a  man  cannot 
live ;  and  self-conservation  is  a  law  of  nature  which 
it  is  wrong  to  disobey.  Now  if  we  were  to  consider 
labor  merely  in  so  far  as  it  is  personal,  doubtless  it 
would  be  within  the  workman's  right  to  accept  any 
rate  of  wages  whatever ;  for  in  the  same  way  as  he 
is  free  to  work  or  not,  so  he  is  free  to  accept  a  small 
remuneration  or  none  at  all.  But  this  is  a  mere  ab- 
stract supposition ;  the  labor  of  the  workman  is  not 
only  his  personal  attribute,  but  is  necessary ;  and 
this  makes  all  the  difference.  The  preservation  of 
life  is  the  bounden  duty  of  each  and  all,  and  to  fail 
therein  is  a  crime.  It  follows  that  each  one  has  a 
right  to  procure  what  is  required  in  order  to  live: 
and  the  poor  can  procure  it  in  no  other  way  than  by 
work  and  wages. 

"Let  it  be  granted,  then,  that  as  a  rule  workman 
and  employer  should  make  agreements,  and  in  par- 
ticular should  freely  agree  as  to  wages  ;  nevertheless, 
there  is  a  dictate  of  nature  more  imperious  and 
more  ancient  than  any  bargain  between  man  and 
man,  that  the  remuneration  must  be  enough  to  sup- 
port the  wage  earner  in  reasonable  and  frugal  com- 
fort. If  through  necessity,  or  fear  of  a  worse  evil, 
the  workman  accepts  harder  conditions  because  an 
employer  or  contractor  will  give  him  no  better,  he  is 
the  victim  of  fraud  and  injustice." 

Pope  Leo  XIII  was  not,  indeed,  the  first  Catholic 
authority  to  proclaim  this  principle  of  a  Living 
Wage.     It  had  already  been  more  or  less  explicitly 

3  33 


A    LIVING    WAGE 

laid  down  and  defended  by  Ketteler  in  Germany, 
Vogelsang  in  Austria,  de  Pascal  in  France,  Pottier 
in  Belgium,  and  Manning  in  England.  ^  It  was 
the  principle  of  social  justice  that  was  clearest  and 
most  definite  in  the  consciousness  of  those  numerous 
groups  of  Catholic  thinkers  and  agitators  who  dur- 
ing the  preceding  quarter  of  a  century  had  been 
seeking  a  remedy  for  the  industrial  ills  of  modern 
Europe.  It  was  at  least  a  partial  application  to  ex- 
isting economic  conditions  and  institutions  of  the 
traditional  theological  and  canonist  doctrine  of  just 
price.  Indeed,  it  was  the  activity  of  this  Catholic 
social  movement  that,  more  perhaps  than  all  other 
influences  together,  led  the  late  Pontiff  to  issue  the 
encyclical,  "On  the  Condition  of  Labor."  In  a  con- 
versation with  the  Swiss  social  reformer,  Gaspard 
Decurtins,  Pope  Leo  referred  to  the  father  of  the 
movement.  Archbishop  Ketteler,  as  his  "great  fore- 
runner." Nevertheless,  it  was  his  encyclical  that 
converted  the  Living  Wage  doctrine  from  an  im- 
plicit into  an  explicit  principle  of  Catholic  ethics. 

Owing  to  the  individualistic  tendencies  of  Prot- 
estantism, its  many  forms,  and  the  nature  of  its 
organization,  the  Protestant  teaching  on  an  ethical 
standard  of  wages  as  against  the  standard  of  un- 
limited bargaining,  is  less  pronounced  and  less 
uniform  than  that  of  the  Catholic  church.  It  is, 
therefore,  much  more  difficult  of  adequate  presenta- 
tion in  a  brief  survey.  Attention  may,  however,  be 
called  to  one  or  two  important  facts.  No  Protestant 
denomination  has  ever  signified  its  approval  of  the 

^  Cf.  Nitti,  "Catholic  Socialism,"  passim. 
34 


STANDARD    FOR    FIXING    WAGES 

principle  of  unlimited  bargaining,  either  formally 
or  through  the  expressions  of  its  leading  representa- 
tives. On  the  contrary,  numerous  and  able  repre- 
sentatives of  the  leading  denominations  have  fre- 
quently protested  against  the  doctrine,  and  insisted 
that  to  take  advantage  under  the  guise  of  a  free 
contract  of  the  necessities  of  the  laborer  is  to  violate 
the  principles  of  Christianity.  Chief  among  them 
are:  Kingsley,  Maurice,  Hughes,  and  Headlam  in 
England ;  Pastors  Stocker  and  Todt  in  Germany ; 
Gide  and  Waddington  in  France ;  and  Bishop  Potter 
and  Dr.  Gladden  in  the  United  States.  The  first 
three  groups  of  writers  founded  or  identified  them- 
selves with  organizations  for  Christian  social  reform 
which  have  had  a  very  large  influence.  ^ 

III.  Contemporary  Opinion  Regarding  an 
Ethical  Standard  of  Wages. — The  ethical  theory 
underlying  the  method  of  unlimited  bargaining, 
namely,  that  contracts  made  without  force  or  fraud 
are  necessarily  fair,  is,  despite  the  prevailing  prac- 
tice, condemned  by  the  majority  of  disinterested 
persons.  This  attitude  of  mind  is  most  clearly 
shown  in  the  widespread  conviction  that  the  ex- 
orbitant prices  charged  and  the  enormous  profits 
obtained  by  some  of  the  great  trusts  are  not  only  a 
menace  to  public  welfare,  but  positively  unjust  and 
dishonest.  ^  Yet  the  contracts  by  which  this  result 
is  brought  about  are  all  free.  Speaking  of  the 
exorbitant  profits  made  by  a  prominent  corporation 
in  the  manufacture  of  steel  rails,  a  capitalist  and  ex- 

^  Cf.  Nitti,  op.  cit.,  pp.  85-99 ;  and  Rae,  "Contemporary 
Socialism,"  pp.  220-242. 

^  Cf.  Sidgwick,  "Methods  of  Ethics,"  p.  288,  6th  ed. 

35 


A    LIVING    WAGE 

senator  of  the  United  States  not  long  ago  declared : 
"If  this  is  not  robbery  I  would  like  to  find  some 
stronger  word  to  characterize  it."  With  this  view 
practically  the  whole  of  the  American  people  would 
agree.  Nevertheless,  the  purchasers  of  steel  rails 
are  neither  deceived  nor  coerced;  the  transaction  is 
free.  Again,  the  money  shark  who  trades  on  the 
distress  or  ignorance  of  the  poor  by  charging  ex- 
orbitant rates  of  interest,  gives  his  victims  the 
benefit  of  a  free  contract ;  yet  he  is  restrained  by  the 
civil  law  and  condemned  by  the  public  conscience. 
Similarly  with  bargains  where  the  subject  matter 
is  human  services.  A  drowning  man  calls  to  an- 
other for  help.  The  latter  replies :  "I  will  save  you 
if  you  pay  me  a  million  dollars."  The  distressed 
millionaire  prefers  life  on  this  hard  condition  to 
death  without  it,  and  quickly  closes  the  contract. 
The  contract  was  free,  was  a  source  of  some  gain 
for  both  parties,  but  who  would  affirm  that  it  was 
just?  And  the  employer  who  takes  advantage  of 
the  need  of  his  fellow  man  and  hires  him  at  starva- 
tion wages,  has  merely  made  a  free  bargain.  The 
laborer  agrees  to  the  harsh  conditions  because  they 
mean  for  him  the  preservation  of  life;  they  repre- 
sent an  advantage  as  compared  with  the  alternative 
of  starvation.  Still,  with  the  exception  of  the  em- 
ployer and  those  who  look  at  the  matter  from  his 
point  of  view,  the  entire  community  would  insist  that 
somehow  the  transaction  was  wrong.  In  the  words 
of  Dr.  Cunningham,  "we  feel  that  it  is  unfair  for 
the  economically  strong  to  wring  all  that  he  can  out 

36 


STANDARD    FOR    FIXING    WAGES 

of  the  economically  weak."  ^  Hence,  in  a  dispute 
between  an  employer  and  his  poorly-paid  laborers, 
public  sympathy  is  invariably  on  the  side  of  the 
latter.  Indeed,  it  may  be  said  with  confidence  that 
the  common  sense  and  unbiased  convictions  of  the 
community  not  only  repudiate  the  theory  that  free 
contracts  are  always  just,  but  maintain  that  when 
the  laborer  is  compelled  to  accept  less  than  a  cer- 
tain decent  minimum  of  remuneration  he  is  in  truth 
defrauded. 

Belief  in  the  Living  Wage  principle  has  always 
been  more  or  less  firm  in  the  consciousness  of  the 
laborer  himself,  but  only  recently  has  it  taken  the 
form  of  an  explicit  demand.  -  In  England  the 
right  to  a  minimum  of  pay  has  become  one  of  the 
fundamental  assumptions  of  Trade  Unionism.  "It  is 
a  vital  principle,"  says  one  of  the  Trade  Union  lead- 
ers, "that  a  man  by  his  labor  should  live,  and  not- 
withstanding all  the  teachings  of  political  economists 
and  all  the  doctrines  taught  by  way  of  supply  and 
demand,  a  greater  doctrine  overrides  all  these,  the 
doctrine  of  humanity."  ^ 

The  Labor  Unions  of  America  do  not  often  use  the 
phrase,  "a  Living  Wage,"  nor  explicitly  outline  the 
concept  that  it  represents,  but  they  express  the 
same  idea  in  their  "Union  Scale."  This  is  the  rate  of 
wages  that  the  Union  demands  for  its  members  in 
any  particular  industry.  It  is  in  reality  the  mini- 
mum that  the  Unionists  regard  as  compatible  with 

^  "Western   Civilization,"  vol.  ii,  p.  80. 

'  Webb,  "Industrial  Democracy,"  p.  582,  sq. 

'Idem,  loc.  cit. 

37 


A    LIVING    WAGE 

right  living.  They  reject,  therefore,  the  standard 
of  unHmited  bargaining,  inasmuch  as  they  estabHsh 
a  minimum;  and  they  substitute  the  standard  of  a 
Living  Wage,  inasmuch  as  they  look  upon  this 
minimum  as  the  lowest  rate  for  which  a  man  ought 
to  work.  It  might  be  objected  that  the  Union  Scale 
is  not  intended  to  be  an  ethical  standard,  but  merely 
represents  what  the  Unionists  think  they  are  strong 
enough  to  obtain.  It  is  true  that  they  try  to  get  as 
high  a  wage  as  possible,  but  this  is  a  matter  of  prac- 
tical policy  arising  out  of  actual  conditions.  Behind 
it  is  always  the  conviction  that  there  is  involved  a 
question  of  morals.  They  believe  that  they  ought 
to  have  at  least  sufficient  remuneration  to  afford 
them  a  decent  livelihood.  Many  of  them,  indeed, 
hold  that  they  have  a  right  to  more  than  this 
minimum ;  but  this  is  merely  an  additional  proof 
that  the  idea  of  an  ethical  standard  is  present  to 
their  consciousness.  ^ 

Nor  is  the  principle  of  the  minimum  wage  entire- 
ly unknown  to  existing  legal  codes.  The  Compul- 
sory Arbitration  act  of  New  Zealand  decrees  that 
minors  shall  not  be  employed  in  factories  for  less 
than  a  certain  sum  per  week,  and  that  all  laborers 
on  public  contracts  shall  receive  at  least  the  rates  of 
wages  that  "are  considered  usual  and  fair  in  the 
locality."  In  Victoria,  Australia,  legal  boards  have 
been  created  with  authority  to  establish  a  minimum 

^  Cf.  the  address,  "A  Living  Wage,"  delivered  by  President 
Gompers  before  the  Nineteenth  Century  Club,  and  printed  in 
the  "American  Federationist"  for  April,  1898;  also  the  testi- 
mony of  Presidents  Gompers  and  Schaffer  before  the  U.  S. 
Industrial  Commission ;  vol.  vii,  pp.  397,  614  of  the  Report 
of  the  Commission. 

38 


STANDARD    FOR    FIXING    WAGES 

wage,  for  the  express  purpose  of  preventing  the 
remuneration  of  any  class  of  workers  from  being 
reduced  below  the  cost  of  living.  And  the  New 
Zealand  Court  of  Arbitration  is  empowered  to  fix 
a  minimum  wage  that  will  apply,  not  only  to  the 
parties  interested  in  any  particular  dispute,  but  to 
all  who  are  "connected  with  or  engaged  in  the  indus- 
try to  which  the  award  applies  within  the  industrial 
district  to  which  the  award  relates," 

The  brief  discussion  of  the  authorities  for  and 
against  the  practice  of  unlimited  bargaining  con- 
tained in  this  and  the  preceding  chapters,  is  not,  of 
course,  an  adequate  historical  review  of  the  subject. 
It  has,  however,  a  certain  value,  inasmuch  as  it  gives 
some  notion  of  the  different  attitudes  which  men 
have  taken  toward  the  ethical  side  of  the  wage-con- 
tract. For  if  there  is  any  field  of  study  in  which 
principles  stand  out  in  clearer  light  when  they  are 
seen  as  others  see  them,  it  is  the  field  of  ethics,  and 
especially  of  applied  ethics.  Every  new  viewpoint 
that  is  taken,  every  new  opinion,  no  matter  how  fan- 
tastic, that  is  considered,  contributes  something  to 
our  understanding  of  the  nature  and  bearing  of 
ethical  truths. 

Our  conclusions  from  the  present  study  are :  first, 
that  men  have  always  regarded  the  fixing  of  wages 
as  in  some  degree  an  ethical  action ;  and,  secondly, 
that  the  preponderance  of  human  opinion  is  decided- 
ly against  the  method  of  unlimited  bargaining.  The 
belief  that  the  amount  of  remuneration  given  the 
laborer  is  entirely  devoid  of  moral  aspects,  in  other 
words,  that  "there  is  no  such  thing  as  fair  wages," 

39 


A    LIVING    WAGE 

has  never  been  held  by  any  considerable  section  of 
any  community.  Either  explicitly  or  implicitly  men 
have  always  been  virtually  unanimous  in  the  con- 
viction that  the  standard  for  determining  wages 
should  be  a  moral  standard.  Even  the  method  of 
unlimited  bargaining,  which  is  on  its  face  non- 
ethical,  was  advocated  by  economists  and  legislators 
chiefly  because  they  believed  that  its  results  would 
be  morally  good.  They  expected  it  to  bring  about 
the  greatest  attainable  measure  of  social  iustice. 
Indeed,  so  long  as  men  remain  ethical  beings,  they 
cannot  ignore  the  moral  aspects  of  any  particular 
policy  that  they  recommend.  ^  Finally,  although 
the  method  of  unlimited  bargaining  is  the  prevailing 
one,  it  is  less  than  one  century  in  existence,  and  was 
established  through  the  mistaken  efforts  of  econo- 
mists and  legislators.  Previously  to  that  period, 
it  was  frowned  upon  by  the  political,  religious  and 
moral  forces  of  society.  It  is  condemned  to-day, 
not  merely  by  the  laborers,  but  by  the  moral  sense 
of  the  greater  and  saner  part  of  the  community. 

'  Cf.  Professor  Foxwell's  Introduction  to  Menger's  "Right 
to  the  Whole  Produce  of  Labor,"  p.  xi. 


40 


SECTION  II 

THE  BASIS,  NATURE,  AND  CON- 
TENT OF  THE  RIGHT  TO 
A  LIVING  WAGE 


CHAPTER  III 


The  Basis  and  Justification  of  Rights 

The  claim  to  a  Living  Wage  is  a  right.  Character  and 
purpose  of  rights.  Sense  in  which  natural  rights  are  ab- 
solute. Men's  natural  rights  are  equal  in  the  abstract,  but 
unequal  in  the  concrete.  They  are  based  on  the  duty  of 
pursuing  self-perfection.  Other  methods  of  establishing 
their  validity.  The  doctrine  of  natural  rights  incompatible 
with  individualistic  hedonism.  The  positivistic  theory  of 
rights  means  in  the  concrete  that  some  lives  are  worth  less 
than  others.  It  has  less  theoretical  weakness  when  stated 
in  terms  of  Hegelianism.  Fallacy  of  the  popular  argument 
against  natural  rights.  The  exaggeration  of  natural  rights 
in  the  system  of  the  Revolutionary  philosophers.  The 
doctrine  as  here  advocated  holds  a  middle  ground  between 
semi-anarchism  and  state  absolutism. 

The  thesis  to  be  maintained  in  this  volume  is  that 
the  laborer's  claim  to  a  Living  Wage  is  of  the  na- 
ture of  a  right.  This  right  is  personal,  not  merely 
social :  that  is  to  say,  it  belongs  to  the  individual  as 
individual,  and  not  as  member  of  society;  it  is  the 
laborer's  personal  prerogative,  not  his  share  of  social 
good;  and  its  primary  end  is  the  welfare  of  the 
laborer,  not  that  of  society.  Again,  it  is  a  natural, 
not  a  positive  right ;  for  it  is  born  with  the  individ- 
ual, derived  from  his  rational  nature,  not  conferred 
upon  him  by  a  positive  enactment.     In  brief,  the 

43 


A    LIVING    WAGE 

right  to  a  Living  Wage  is  individual,  natural  and 
absolute, 

A  right  in  the  moral  sense  of  the  term  may  be 
defined  as  an  inviolable  moral  claim  to  some  personal 
good.  When  this  claim  is  created,  as  it  sometimes 
is,  by  civil  authority  it  is  a  positive  or  legal  right; 
when  it  is  derived  from  man's  rational  nature  it  is 
a  natural  right.  All  rights  are  means,  moral  means, 
vv^hereby  the  possessor  of  them  is  enabled  to  reach 
some  end.  Natural  rights  are  the  moral  means  or 
opportunities  by  which  the  individual  attains  the 
end  appointed  to  him  by  nature.  For  the  present 
it  is  sufficient  to  say  that  this  end  is  right  and  reason- 
able life.  The  exigencies  of  right  and  reasonable 
living,  therefore,  determine  the  existence,  and  num- 
ber, and  extent  of  man's  natural  rights.  Just  as  his 
intellectual,  volitional,  sensitive,  nutritive  and  motive 
faculties  are  the  positive,  or  physical,  agencies  by 
which  he  lives  and  acts  as  a  human  being,  so  his  nat- 
ural rights  are  the  moral  faculties  requisite  to  the 
same  end.  He  cannot  attain  this  end  adequately  un- 
less he  is  regarded  by  his  fellows  as  morally  immune 
from  arbitrary  interference.  They  must  hold  them- 
selves morally  restrained  from  hindering  him  in  the 
reasonable  exercise  of  his  faculties.  His  powers 
of  intellect,  will,  sense,  nutrition  and  motion  will  be 
of  little  use  to  him  if  his  neighbors  may  licitly  de- 
prive him,  whenever  it  may  suit  their  convenience, 
of  his  external  goods,  or  his  liberty,  or  his  mem- 
bers, or  his  life.  In  addition  to  his  positive  powers, 
he  stands  in  need  of  those  moral  powers  which  give 
to  his  claim  upon  certain  personal  goods  that  char- 

44 


JUSTIFICATION    OF    RIGHTS 

acter  of  sacredness  which  restrains  or  tends  to  re* 
strain  arbitrary  interference  by  his  fellows. 

Man's  natural  rights  are  absolute,  not  in  the  sense 
that  they  are  subject  to  no  limitations — which  would 
be  absurd — but  in  the  sense  that  their  validity  is  not 
dependent  on  the  will  of  anyone  except  the  person 
in  whom  they  inhere.  They  are  absolute  in  ex- 
istence but  not  in  extent.  Within  reasonable  limits 
their  sacredness  and  binding  force  can  never  cease. 
Outside  of  these  limits,  they  may  in  certain  con- 
tingencies disappear.  If  they  were  not  absolute  to 
this  extent,  if  there  were  no  circumstances  in  which 
they  were  secure  against  all  attacks,  they  would  not 
deserve  the  name  of  rights.  The  matter  may  be 
made  somewhat  clearer  by  one  or  two  examples. 
The  right  to  life  is  said  to  be  absolute  because  no 
human  power  may  licitly  kill  an  innocent  man  as  a 
mere  means  to  the  realization  of  any  end  whatever. 
The  life  of  the  individual  person  is  so  sacred  that, 
as  long  as  the  right  thereto  has  not  been  forfeited  by 
the  perverse  conduct  of  the  subject  himself,  it  may 
not  be  subordinated  to  the  welfare  of  any  other  in- 
dividual or  any  number  of  individuals.  Not  even 
to  preserve  its  own  existence  may  the  State  directly 
and  deliberately  put  an  unoffending  man  to  death. 
When,  however,  the  individual  is  not  innocent,  when 
by  such  actions  as  murder  or  attempted  murder  he 
has  forfeited  his  right  to  live,  he  may,  of  course,  be 
rightfully  executed  by  civil  authority,  or  killed  in 
self-defense  by  his  fellow  man.  He  may  also  be 
compelled  to  risk  his  life  on  behalf  of  his  country, 
for  that  is  a  part  of  his  duty ;  and  he  may  with  en- 

45 


A    LIVING    WAGE 

tire  justice  be  deprived  of  life  indirectly  and  inci- 
dentally, as  when  non-combatants  are  unavoidably 
killed  in  a  city  that  is  besieged  in  time  of  war. 
Again,  the  right  to  liberty  and  property  are  not 
absolute  in  the  sense  that  the  individual  may  have 
as  much  of  these  goods  as  he  pleases  and  do  with 
them  as  he  pleases,  but  inasmuch  as  within  reason- 
able limits — which  are  always  determined  by  the 
essential  needs  of  personal  development — these 
rights  are  sacred  and  inviolable. 

With  respect  to  their  natural  rights,  all  men  are 
equal,  because  all  are  equal  in  the  rational  nature 
from  which  such  rights  are  derived.  By  nature 
every  man  is  a  person,  that  is,  a  rational,  self-active, 
independent  being.  Every  man  is  rational  because 
endowed  with  the  faculties  of  reason  and  will.  His 
will  impels  him  to  seek  the  good,  the  end,  of  his 
being,  and  his  reason  enables  him  to  find  and  adjust 
means  to  this  end.  Every  man  is  self-active,  inas- 
much as  he  is  master  of  his  own  faculties  and  able  in 
all  the  essentials  of  conduct  to  direct  his  own  actions. 
Every  man  is  independent  in  the  sense  that  he  is 
morally  complete  in  himself,  is  not  a  part  of  any 
other  man,  nor  inferior  to  any  man,  either  in  the 
essential  qualities  of  his  being  or  in  the  end  toward 
which  he  is  morally  bound  to  move.  In  short, 
every  individual  is  an  "end  in  himself,"  and  has  a 
personality  of  his  own  to  develop  through  the  exer- 
cise of  his  own  faculties.  Because  of  this  equality 
in  the  essentials  of  personality,  men  are  of  equal 
intrinsic  worth,  have  ends  to  attain  that  are  of  equal 
intrinsic  importance,  and  consequently  have  equal 


JUSTIFICATION    OF    RIGHTS 

natural  rights  to  the  means  without  which  these 
ends  cannot  be  achieved. 

Only  in  the  abstract,  however,  are  men's  natural 
rights  equal.  In  the  concrete  they  are  unequal, 
just  as  are  the  concrete  natures  from  which  they 
spring.  ^  This  is  not  to  say  that  equality  of  rights 
is  an  empty  abstraction,  without  any  vital  meaning 
or  force  or  consequences  in  actual  life.  Men  are 
equal  as  regards  the  number  of  their  natural  rights. 
The  most  important  of  these  are  the  rights  to  life, 
to  liberty,  to  property,  to  a  livelihood,  to  marriage, 
to  religious  worship,  to  intellectual  and  moral  edu- 
cation. These  inhere  in  all  men  without  distinction 
of  person,  but  they  have  not  necessarily  the  same 
extension,  or  content,  in  all.  Indeed,  proportional 
justice  requires  that  individuals  endowed  with  dif- 
ferent powers  should  possess  rights  that  vary  in  de- 
gree. For  example,  the  right  to  a  livelihood  and 
the  right  to  an  education  will  include  a  greater 
amount  of  the  means  of  living  and  greater  oppor- 
tunities of  self-improvement  in  the  cases  of  those 
who  have  greater  needs  and  greater  capacities.  But 
in  every  case  the  natural  rights  of  the  individual 
will  embrace  a  certain  minimum  of  the  goods  to 
which  these  rights  refer,  which  minimum  is  de- 
termined by  the  reasonable  needs  of  personality. 
The  rights  that  any  person  will  possess  in  excess  of 
this  minimum  will  depend  upon  a  variety  of  cir- 
cumstances, individual  and  social.     Hence,  instead 

*  For  an  explanation  of  the  distinction  between  abstract  or 
specific  and  concrete  or  individual  equality,  see,  Taparelli, 
"Droit  nature!,"  nos.  354-363,  and  Naudet,  "La  democratie," 
ch.  XV. 

47 


A    LIVING    WAGE 

of  saying  that  the  natural  rights  of  all  men  are 
equal  in  the  abstract  but  not  in  the  concrete,  it 
would  perhaps  be  more  correct,  or  at  least  less  mis- 
leading, to  describe  them  as  equal  in  kind,  number 
and  sacredness,  and  in  extension  relatively  to  their 
particular  subjects;  but  not  in  quantity  nor  in  abso- 
lute content. 

Such  in  bare  outline  is  the  theory  of  the  character, 
purpose,  and  extent  of  natural  rights.  Do  they 
really  exist?  Is  the  individual  really  endowed  with 
moral  prerogatives,  inviolable  claims,  in  virtue  of 
which  it  is  wrong,  for  instance,  to  take  from  him, 
so  long  as  he  is  innocent  of  crime,  his  life  or  his 
liberty?  Whence  comes  the  validity  and  sacredness 
of  these  claims  ?  The  answers  to  these  questions  have 
already  been  briefly  indicated  in  the  statement  of 
the  end  for  which  the  claims  exist.  Natural  rights 
are  necessary  means  of  right  and  reasonable  living. 
They  are  essential  to  the  welfare  of  a  human  being, 
a  person.  They  exist  and  are  sacred  and  inviolable 
because  the  welfare  of  the  person  exists — as  a  fact 
of  the  ideal  order — and  is  a  sacred  and  inviolable 
thing.  It  was  Cicero  who  wrote:  "Fine  in  phil- 
osophia  constitute,  constituta  sunt  omnia,"  In 
problems  of  philosophy,  when  we  have  established 
the  end  we  have  established  all  things  else.  Let  us 
look  more  deeply,  then,  into  the  scope  and  character 
of  this  end  to  which  natural  rights  are  but  means. 

Right  and  reasonable  life,  the  welfare  of  the  per- 
son, consist  in  the  development  of  man's  personality 
through  the  harmonious  and  properly  ordered  ex- 
ercise of  his  faculties.     He  should  subordinate  his 


JUSTIFICATION    OF    RIGHTS 

sense- faculties  to  his  rational  faculties ;  exercise  his 
rational  faculties  consistently  with  the  claims  of  his 
Creator  and  the  reasonable  demands  of  his  fellows; 
and  seek  the  goods  that  minister  to  the  senses  and 
the  selfish  promptings  of  the  spirit  in  subordination 
to  the  higher  goods,  namely,  those  of  the  intellect 
and  of  the  disinterested  will.  In  a  word,  the  su- 
preme earthly  goal  of  conduct  is  to  know  in  the 
highest  degree  the  best  that  is  to  be  known,  and  to 
love  in  the  highest  degree  the  best  that  is  to  be 
loved.  These  highest  objects  of  knowledge  and 
love  are  God,  and,  in  proportion  to  the  degrees  of 
excellence  that  they  possess,  His  creatures.  To 
prove  that  these  moral  and  spiritual  values  are  facts, 
we  have  only  to  appeal  to  the  consciousness  of  any 
normally  constituted  human  being.  The  average 
man  has  an  abiding  conviction  that  the  rational 
faculties  are  higher,  nobler,  more  excellent,  of  great- 
er intrinsic  worth  than  the  sense- faculties ;  that 
consequently  the  goods  of  the  mind  are  to  be  pre- 
ferred to  those  of  the  senses;  and  that  among  the 
activities  of  the  rational  powers  those  dictated  by 
disinterested  love  are  intrinsically  better  than  those 
which  make  for  selfishness.  These  primary  and 
general  moral  intuitions  produce  in  the.  mind  of  the 
person  who  heeds  them  the  conviction  that  it  is  not 
only  reasonable  but  obligatory  for  him  to  pursue  the 
path  of  conduct  thus  dimly  outlined.  The  imme- 
diate objective  basis  of  this  obligation  is  the  intrin- 
sic superiority  of  the  higher  faculties,  the  infinite 
worth  of  God,  and  the  essential  sacredness  of  human 
personality.  The  ultimate  source  of  the  obligation 
4  49 


A    LIVING    WAGE 

is  the  Will  of  God ;  just  as  the  ultimate  source  of  the 
distinction  between  the  higher  and  lower  faculties, 
activities,  and  goods  is  the  Divine  Essence;  and 
just  as  the  ultimate  source  of  the  intuitions  by  which 
we  perceive  these  distinctions  is  the  Divine  Reason. 

Since,  therefore,  the  individual  is  obliged  to  live 
a  moral  and  reasonable  life  in  the  manner  just 
described,  the  means  to  this  end,  i.  e.,  natural  rights, 
are  so  necessary  and  so  sacred  that  all  other  persons 
than  the  one  in  whom  they  reside  are  morally  re- 
strained from  interfering  with  or  ignoring  them. 
The  dignity  of  personality  imposes  upon  the  individ- 
ual the  duty  of  self-perfection ;  he  cannot  fulfil  this 
duty  adequately  unless  he  is  endowed  with  natural 
rights.  Such  is  the  immediate  basis  of  natural  rights 
and  the  proximate  source  of  their  sacredness ;  their 
ultimate  source  is  to  be  found  in  the  Reason  and 
Will  of  God,  who  has  decreed  that  men  shall 
pursue  self-perfection  and  that  they  shall  not  arbi- 
trarily deprive  one  another  of  the  means  essential 
to  this  purpose. 

This  method  of  basing  the  individual's  natural 
rights  upon  his  duties  is  perhaps  the  one  most  com- 
monly employed  by  those  writers  who  hold  indi- 
vidual perfection  to  be  the  immediate  end  and  rule 
of  conduct.  According  to  another  mode  of  reason- 
ing, they  rest,  not  upon  the  duties  of  their  possessor, 
but  upon  those  duties  of  other  men  toward  him  which 
are  called  juridical,  that  is,  the  "other-regarding" 
duties  that  cover  goods  which  in  the  strict  sense 
belong  to  him  as  his  own.  Thus  the  fulfilment  of 
lawful  contracts  is  a  juridical  duty,  while  assisting 

SO 


JUSTIFICATION    OF    RIGHTS 

the  needy  is  only  a  duty  of  charity.  All  juridical 
duties  may  be  summed  up  in  the  command,  "thou 
shalt  not  arbitrarily  interfere  with  the  external  liber- 
ty of  thy  fellow  man,"  for  external  liberty  comprises 
all  those  opportunities  of  activity,  acquisition  and 
possession  that  are  essential  to  the  pursuit  of  reason- 
able self-perfection.  Corresponding  to  and  implied 
by  these  juridical  duties  in  one  man  are  those  moral 
prerogatives  in  other  men  that  we  call  natural  rights. 
The  foundation  and  source  of  these  duties  is  that 
precept  of  the  natural  law  (understanding  by  natural 
law  that  portion  of  God's  eternal  law  which  applies 
to  human  conduct  and  is  written  in  the  human  rea- 
son) which  enjoins  men  to  respect  the  dignity  of 
human  personality  in  one  another,  i 

This  line  of  argument,  however,  suggests  that  not 
even  the  juridical  duties  of  men  are  formally  neces- 
sary as  a  basis  and  justification  of  natural  rights. 
These  duties  are,  indeed,  imposed  upon  man  by  the 
natural  law,  but  the  reason  why  this  particular  pre- 
cept of  the  law  exists,  as  well  as  the  reason  that  con- 
strains us  to  believe  that  it  does  exist,  is  to  be  found 
in  the  intrinsic  and  inviolable  worth  of  the  individ- 
ual. That  is  the  ultimate  basis — on  this  side  of  God 
— of  both  juridical  duties  and  natural  rights.  To 
prove  the  existence  of  the  latter,  it  seems,  therefore, 
logically  sufficient  to  show  that  because  of  his  in- 
trinsic dignity  a  person  is  morally  privileged  to  pur- 
sue self-perfection,  and  his  fellows  are  morally 
restrained  from  hindering  his  exercise  of  the  priv- 

*  Cf.  "Philosophia  Moralis,"  by  Julius  Costa-Rosetti,  2d 
edition,  thesis  114. 

SI 


A    LIVING    WAGE 

ilege.  Natural  rights  may  be  likened  to  the  legal 
right  by  which  a  man  holds  a  piece  of  land  that  he 
has  bought  from  the  State.  His  claim  thereto  is 
founded  neither  upon  his  duty  to  support  his  family 
(to  which  end  the  produce  of  the  land  may  be  as- 
sumed to  be  the  necessary  means)  nor  upon  the 
obligation  which  binds  his  neighbors  to  leave  him 
in  undisturbed  possession.  Similarly,  the  indi- 
vidual's natural  rights  may  be  regarded  as  inde- 
pendent both  of  his  own  duties  and  of  the  duties 
which  these  rights  occasion  in  his  fellows.  ^ 

Finally,  natural  rights  can  be  logically  defended 
on  the  principles  of  what  may  be  called  intuitive 
hedonism.  There  are  men  who  maintain  that  the 
supreme  end  and  rule  of  conduct  is  universal  happi- 
ness. By  this  phrase  they  mean,  not  "the  greatest 
happiness  of  the  greatest  number,"  nor  the  general 
happiness  of  the  group  or  of  society, — all  of  which 
are  equivalent  in  the  concrete  to  the  happiness  of  the 
majority — but  the  happiness  of  each  and  every  hu- 
man being.  They  insist  that,  since  human  happiness 
is  the  good  of  a  person,  it  has  intrinsic  zvorth,  is  in 
itself  a  sacred  thing,  and  that  all  individuals  have, 
therefore,  essentially  equal  claims  to  the  opportunity 
of  pursuing  it.  This  doctrine  is  hedonistic,  inas- 
much as  it  makes  happiness  the  ultimate  end,  and 
intuitive,  inasmuch  as  it  postulates  not  merely  the 
desirableness  of  personal  happiness,  but  the  intrinsic 
worth  of  all  human  happiness.     The  late  Professor 

^  Cf.  "The  Theory  of  Morals,"  by  Paul  Janet,  Book  II,  ch, 
IV,  in  which  the  author  defends  a  doctrine  very  similar  to  the 
one  just  outlined,  although  he  strangely  calls  a  right  a  "respon- 
sibility." 

52 


JUSTIFICATION    OF    RIGHTS 

Sidgwick  held  substantially  this  view,  although 
he  admitted  that  it  contains  an  inherent  contradic- 
tion. 1  For  if  the  intuition  of  "rational  benevo- 
lence" be  acknowledged  as  logically  sufficient  to  com- 
pel me  to  forego  my  own  happiness  for  the  greater 
happiness  of  others,  then  the  ultimate  end,  rule  and 
determinant  of  right  action  is  no  longer  my  happi- 
ness— which  is  the  only  "desirable  consciousness" 
that  can  have  any  meaning  for  me — but  conformity 
to  the  dictates  of  reason.  In  other  words,  reason 
assures  me  that  human  happiness  is  valuable  per  se, 
while  all  my  aspirations  and  experiences  tell  me 
happiness  is  a  good  only  in  so  far  as  it  provides 
me  with  agreeable  states  of  consciousness.  If,  how- 
ever, the  general  principle  be  admitted  in  spite  of 
its  inherent  weakness,  a  system  of  natural  rights 
can  be  logically  deduced  therefrom. 

All  of  these  methods,  therefore,  posit  as  the  ulti- 
mate earthly  basis  of  the  individual's  natural  rights 
the  inherent  sacredness  of  his  personality.  This  is 
true  even  of  the  argument  which  derives  rights  from 
the  duty  of  perfecting  one's  self;  for  this  duty  is 
itself  founded  upon  the  intrinsic  worth  of  the  person, 
specifically  of  his  higher  faculties.  Hence  we  find 
that  those  who  reject  the  doctrine  of  natural  rights, 
and  who  reason  logically,  reject  likewise  the  princi- 
ple of  the  essential  and  absolute  dignity  of  every 
human  being.  They  either  deny  that  anything  in  the 
universe  possesses  intrinsic  worth,  or  assert  that 
social  welfare  is  the  highest  good.     To  the  former 

*  See  his  "Methods  of  Ethics,"  Book  III,  chapters  XIII  and 
XIV ;  and  Book  IV,  concluding  chapter,  6th  ed. 


Al    LIVING    WAGE 

class  belong  the  believers  in  egoistic  hedonism ;  to  the 
latter,  the  social  utilitarians  and  the  Hegelians. 

For  those  who  maintain  that  the  supreme  end  of 
life  and  rule  of  conduct  is  one's  own  happiness, 
there  can,  of  course,  be  no  such  thing  as  a  right  in 
the  moral  sense  of  the  term.  There  is  no  sacred- 
ness,  no  intrinsic  worth,  no  obligation-compelling 
force  in  either  the  concept  or  the  fact  of  happiness 
unqualified  and  divorced  from  all  consideration  of 
the  dignity  of  personality.  The  person  who  refuses 
to  seek  his  own  happiness  can  be  condemned  as  un- 
wise but  not  as  immoral.  And  if  he  is  not,  in  any 
true  sense  of  the  word,  under  moral  obligation  to  pro- 
cure happiness  for  himself,  neither  is  he  bound  by  any 
sort  of  duty  to  respect  or  refrain  from  hindering  the 
happiness  of  others.  As  there  is  no  sacredness  in 
the  end — happiness — and  none  in  the  persons  pur- 
suing it,  so  there  can  be  no  sacredness  in  the  means — 
those  opportunities  of  activity  that  we  call  rights — 
and  no  obligation  to  respect  them.  In  such  a  system 
individual  rights  have  neither  logical  foundation 
nor  intelligible  meaning.  Again,  if  personal  happi- 
ness be  the  ultimate  aim  and  criterion  of  reasonable 
conduct  it  is  altogether  fitting  and  reasonable  that 
each  man  should  interpret  happiness  in  his  own  way, 
and  strive  to  obtain  it  by  whatever  means  seem  to 
him  best,  regardless  of  such  unreasonable  and  un- 
founded restraints  as  rights  and  obligations. 

This  purely  egoistic  hedonism  seems  to  be  com- 
pletely and  consistently  accepted  by  only  a  very  small 
minority  of  the  world's  thinkers.  Even  with  them 
it  is  a  merely  speculative  belief.     In  practice  they 

54 


JUSTIFICATION    OF    RIGHTS 

reject  or  at  least  modify  it,  in  common  with  the 
overwhelming  majority  of  the  men  and  women  who 
live  outside  of  lunatic  asylums.  A  formal  refuta- 
tion of  it  in  the  interest  of  the  doctrine  of  natural 
rights  is,  therefore,  unnecessary.  Of  much  greater 
importance  for  our  contention  is  the  theory  that  all 
rights  are  positive,  that  is,  derived  from  society,  and 
conferred  upon  the  individual  primarily  for  the 
benefit  of  society  and  only  secondarily  for  the  sake 
of  the  individual.  ^     Individual  rights  are  valid  in 

*  In  substance  this  theory  seems  to  be  held  by  a  majority 
of  the  non-Catholics  of  our  time  who  write  on  justice  and 
political  philosophy.  Not  all  state  it  in  the  same  language  nor 
restrict  the  concrete  rights  of  the  individual  to  the  same  extent, 
but  all  accept  the  principle  that  the  individual  has  no  right 
which  society  may  not  in  certain  contingencies  annul  for  its 
own  welfare.  The  sources  of  the  theory  are  chiefly:  (i) 
writers  who  opposed  the  doctrines  of  the  French  Revolution, 
such  as,  Edmund  Burke  in  "Reflections  on  the  Revolution  in 
France,"  and  Joseph  de  Maistre  in  "Essai  sur  le  principe 
generateur  des  constitutions  politiques" ;  (2)  juristic  writers 
who,  in  opposition  to  the  Eigheenth  century  teaching  on 
natural  rights,  endeavored  to  place  all  rights  on  a  basis  of 
historical  facts  and  development,  the  most  prominent  of  whom 
were  F.  C.  de  Savigny  in  "System  des  roemischen  Rechts," 
and  F.  C.  Stahl  in  "Philosophic  des  Rechts" ;  (3)  the  Hegelian 
conception  of  the  State  as  the  highest  manifestation  of  the 
Universal  Reason  and  Will,  tne  source  of  all  rights,  and  the 
absolute  end  to  which  the  individual  must  subordinate  his 
particular  aims  and  activity ;  see  Hegel's  "Grundlinien  der 
Philosophic  des  Rechts,"  and  Lasson's  "System  der  Rechts- 
philosophic" ;  (4)  and  finally,  the  doctrine  of  evolutionist 
utilitarianism,  which  emphasizes  the  importance  of  race  pro- 
gress at  the  expense  of  the  individual. 

Some  indications  of  common  points  in  the  last  two  sources 
will  be  found  in  chapter  H  of  Ritchie's  "Darwin  and  Hegel," 
while  recent  statements  of  the  general  positivistic  theory  of 
rights  are  contained  in  "Natural  Rights,"  by  the  same  author, 
in  Hobson's  "Social  Problem,"  and  in  Willoughby's  "Spcial 
Justice."  Good  presentations  of  the  doctrine  of  natural  rights 
defended  in  this  chapter  are  made  by  Taparelli,  "Droit 
naturel,"  and  Meyer,  "Institutiones  Juris  Naturalis."  Finally 
Hegel's  general  concept  of  personality  is  successfully  attacked 

55 


A    LIVING    WAGE 

so  far  as  they  do  not  hinder  the  social  weal.  "By 
himself,"  says  Mackenzie,  "a  man  has  no  right  to 
anything  whatever.  He  is  a  part  of  the  social  whole ; 
and  he  has  a  right  only  to  that  which  it  is  for  the 
good  of  the  whole  that  he  should  have."  ^  In  this 
view  the  social  organism  becomes  an  end  in  itself; 
and  its  good  becomes  the  final  goal  and  rule  of 
human  conduct.  Now  society  is,  indeed,  something 
more  than  an  abstraction,  something  more  than  the 
sum  of  its  component  individuals.  And  its  function 
is  not  simply  to  guarantee  equal  liberty  to  all  its 
members,  in  the  sense  of  Immanuel  Kant  and  Her- 
bert Spencer.  It  is  a  real  entity,  a  moral  body,  an 
organism,  whose  purpose  is  to  safeguard  the  rights 
and  promote  to  a  reasonable  degree  the  welfare  of 
every  one  of  its  members.  It  is  an  organism  only 
by  analogy,  however ;  not  literally  or  physically.  It 
is  an  organism  inasmuch  as  its  members  are  mutu- 
ally dependent,  and  have  diverse  functions;  inas- 
much as  it  persists  amid  continuous  changes  in  its 
membership,  and  will  retain  its  identity  after  all  its 
present  members  shall  have  perished ;  and  inasmuch 
as  its  health  is  determined  by  the  health  of  its  mem- 
bers, and  in  turn  reacts  upon  the  latter.  When  this 
much  has  been  said  the  analogy  between  society  and 
a  biological  organism  is  about  exhausted.  Society 
is  not  an  organism  in  the  sense  that  it  is  a  finality. 
Its  members  do  not  exist  and  function  for  its  wel- 
fare; they  possess  intrinsic  worth  and  sacredness. 

in  Andrew   Seth's  "Hegelianism   and   Personality,"   especially 
on  pp.  67-69  and  in  the  concluding  chapter. 
^  "A  Manual  of  Ethics,"  p.  296. 

56 


JUSTIFICATION    OF    RIGHTS 

Hence  it  is  not  an  organism  in  which  the  individual's 
personaHty  is  merged  and  lost,  like  the  branch  in  the 
tree,  to  use  the  illustration  of  Hegel.  Society  has, 
indeed,  rights  that  are  distinct  from  the  rights  of 
the  individuals  composing  it,  and  its  scope  and  aims 
reach  beyond  the  welfare  of  the  men  and  women  that 
live  in  it  at  any  given  time.  It  has  the  right,  for 
example,  to  make  war,  which  the  individual  has  not ; 
and  to  prevent  the  ruthless  destruction  of  forests, 
which  prohibition  may  be  contrary  to  the  interests 
and  wishes  of  its  present  members.  Nevertheless, 
every  right  that  society  possesses,  every  act  that  it 
performs,  every  assertion  that  it  makes  of  its  legiti- 
mate power  over  individuals,  is  ultimately  for  the 
sake  of  individuals.  It  cannot  otherwise  be  justi- 
fied, for  it  is  not  an  end  in  itself. 

Let  us  concede  for  the  moment  that  society 
exists  for  its  own  sake,  is  its  own  highest  good.  All 
its  powers,  prerogatives  and  activities  will  be  natur- 
ally used  as  a  means  to  this  end.  Whenever  individ- 
uals, however  innocent  of  wrong  doing,  impede 
society's  progress  they  are  to  be  relentlessly  blotted 
out  of  existence.  Let  us  suppose  that  as  a  result  of 
this  social  selection  the  general  level  of  the  race  is 
much  higher  than  it  would  have  been  had  regard 
been  paid  to  the  "superstition"  of  natural  rights. 
Society  has  been  treated  as  an  end  in  itself,  and  the 
result  is  a  more  excellent  society. 

It  must  be  evident  that  the  individuals  who  have 
been  removed  to  bring  about  this  result  could  not 
reasonably  have  been  expected  to  make  the  sacri- 
fice willingly.     They  could  not  have  been  satisfied 

57 


A    LIVING    WAGE 

to  efface  themselves  for  the  sake  of  society  as  dis- 
tinct from  its  members,  since  this  would  be  to  die 
for  an  abstraction.  Nor  is  it  likely  that  any  con- 
siderable number  of  them  were  willing  to  forego 
existence  in  order  that  the  individuals  who  were  left 
behind  might  enjoy  a  more  complete  existence  in 
the  improved  society;  for  the  real  meaning  of  this 
situation  is  that  the  former  have  been  used  as  mere 
instruments  to  the  welfare  of  the  latter.  It  is  not 
reasonable  to  expect  men  to  devote  themselves  com- 
pletely to  any  other  end  than  their  own  highest 
good,  and  a  superior  society  cannot  be  the  highest 
good  for  those  who  must  be  annihilated  as  a  condi- 
tion of  its  realization.  They  will  very  naturally  pre- 
fer to  run  the  risk  of  securing  their  own  welfare  in 
a  less  perfect  social  organization.  There  is  no  duty 
constraining  one  section  of  the  community — not 
simply  to  risk  their  lives,  as  in  a  just  war — but  to 
submit  to  be  killed  by  the  social  authority,  in  order 
that  the  surviving  citizens  may  have  the  benefit  of  a 
more  efficient  State.  The  same  statement  may  be 
made  concerning  any  other  of  the  individual's 
natural  and  essential  rights.  And  if  the  individuals 
whose  rights  are  treated  as  non-existent  are  neither 
willing  nor  bound  by  moral  obligation  to  make  the 
sacrifice,  the  State  has  certainly  no  right,  no  moral 
power,  to  treat  them  as  a  means  pure  and  simple  to 
the  welfare  of  those  of  its  members  who  are  per- 
mitted to  survive.  For,  juggle  as  we  will  with  the 
terms  "social  utility"  and  "social  welfare,"  talk  as 
obscurely  as  we  may  about  regarding  the  individual 
from  the  viewpoint  of  society,  the  true  meaning  of 

58 


JUSTIFICATION    OF    RIGHTS 

the  assertion  that  the  rights  of  the  individual  are 
derived  from  and  wholly  subordinate  to  society,  is 
that  the  lives  of  those  who  are  less  useful  to  society 
are  essentially  inferior  to  the  lives  of  those  who  are 
more  useful.  And  not  until  those  who  reject  natur- 
al rights  have  succeeded  in  proving  that  some  human 
lives  are  less  sacred,  have  less  intrinsic  worth,  stand 
on  a  lower  grade  of  being  than  others,  can  they  in- 
dulge the  hope  of  winning  over  any  considerable 
number  of  thinkers  to  the  contention  that  the  in- 
dividual— even  the  poorest  and  lowliest  person  that 
breathes — has  no  rights  that  are  indestructible  by 
society. 

The  positivist  theory  of  rights  becomes  more 
formidable,  at  least  at  first  sight,  when  it  is  stated 
in  terms  of  Hegelianism,  The  question  is  no  longer 
one  between  the  relative  interests  and  importance  of 
the  stronger,  wiser  and  more  virtuous  citizens  on 
the  one  hand,  and  of  the  weaker,  less  intelligent  and 
more  vicious  on  the  other.  Organized  society,  or 
the  State,  is  in  this  system  regarded  as  a  good  in 
itself,  the  highest  manifestation  of  the  Universal 
Reason,  which  is  the  only  final  reality.  The  all- 
important  consideration,  then,  is  to  see  that  this 
highest  embodiment  of  the  Universal  Reason  or 
World-Spirit  called  the  State,  shall  reach  the  fullest 
possible  development.  Compared  with  this  purpose, 
the  welfare  of  individuals,  who  are  merely  particular 
and  imperfect  realizations  of  the  one  great  reality, 
is  insignificant.  Their  importance  is  analogous  to 
that  of  the  individual  trees  in  a  beautiful  grove :  the 
totality  called  the  grove  is  the  supreme  end,  to  which 

59 


A    LIVING    WAGE 

the  existence  and  condition  of  any  particular  tree  is 
entirely  subordinate.  The  rights  of  the  individual 
are,  therefore,  derived  from  the  State  and  intended 
for  the  greater  glory  of  the  State.  The  late  Profes- 
sor Ritchie,  one  of  the  ablest  of  the  Hegelians  who 
wrote  in  English,  describes  the  rights  and  dignity 
of  the  human  person  thus :  "Every  human  being  may 
claim  a  right  to  be  considered  as  such,  because  he 
potentially  shares  in  the  consciousness  of  the  Uni- 
versal Reason."!  Each  individual  is,  as  it  were,  a  re- 
ceptacle of  the  Universal  Reason,  and  derives  there- 
from all  his  worth  and  sacredness.  When,  conse- 
quently, the  life  or  liberty  of  the  individual  begins 
to  be  an  obstacle  to  the  activity  or  unfolding  of  the 
Universal  Reason,  whenever  the  interests  of  the 
Universal  Reason  demand  that  any  given  individual 
should  cease  to  embody  it,  he  may  lawfully  be  put  to 
death,  just  as  a  diseased  limb  may  be  severed  from 
the  body,  or  a  leaking  pot  be  consigned  to  the  scrap 
heap.  If  the  Pantheistic  basis  of  this  deification  of 
the  State  be  accepted  the  theory  of  rights  reared 
upon  it  is  entirely  logical.  It  may  well  be  doubted, 
however,  whether  this  blind,  impersonal  entity  known 
as  the  Universal  Reason  seems  to  any  considerable 
number  of  persons  to  have  the  moral  authority  re- 
quisite to  oblige  them  to  surrender  their  particular 
existence  for  Its  aggrandizement.  And  of  the  few 
who  may  recognize  the  supreme  rights  of  the  Uni- 
versal Reason,  not  all  will  acknowledge  that  Its 
loftiest  manifestation  is  to  be  found  in  the  very  falli- 
ble and  very  imperfect  State  in  which  they  happen 

*  "Natural  Rights,"  pp.  96,  97. 
60 


JUSTIFICATION     OF    RIGHTS 

to  live.  An  attempt  to  refute  the  metaph3'sical  as- 
sumptions underlying  the  Hegelian  theory  of  rights 
is,  consequently,  not  much  needed  at  this  time. 

One  of  the  most  frequent  of  the  popular  arguments 
against  natural  rights  runs  thus :  All  rights  come  in- 
to existence,  become  necessary,  and  obtain  adequate 
protection  only  in  society;  hence  they  are  derived 
from  society,  exist  for  a  social  end,  and  should  be 
exercised  chiefly  for  the  social  welfare.  This  pre- 
sentation is  vitiated  by  an  incorrect  analysis  and  by 
unwarranted  inferences.  Not  all  of  man's  rights 
require  a  social  organization,  or  even  social  contact 
of  any  kind,  in  order  that  they  should  become 
existent.  All  that  is  necessary  is  that  two  men  be 
alive  at  the  same  time.  They  may  be  thousands  of 
miles  apart,  may  not  even  know  of  each  other's  ex- 
istence, yet  each  will  possess  in  full  validity  such 
natural  rights  as  those  of  life,  liberty  and  property, 
and  will  be  morally  restrained  from  hindering  his 
fellow  in  the  reasonable  exercise  of  these  rights. 
As  to  the  second  contention,  it  is  true  that  rights  are 
not  needed  until  men  come  into  some  form  of  social 
intercourse;  for  a  right  means  the  moral  power  of 
restraining  others  from  interfering  with  one's  per- 
sonal goods,  and  if  there  is  no  one  near  enough  to 
interfere  the  moral  restraint  is  unnecessary  and  im- 
practicable ;  but  this  does  not  prove  that  rights  are 
created  by  society,  any  more  than  the  fact  that  even- 
ing dress  is  worn  only  at  certain  "functions"  proves 
that  this  form  of  apparel  is  created  by  or  for  the 
"functions."  The  clothes  are  intended  for  the  in- 
dividual wearers  on  certain  occasions.     In  like  man- 

6i 


A    LIVING    WAGE 

ner,  the  individual's  rights  have  for  their  primary 
purpose  his  own  welfare  in  society.  Finally,  the 
fact  that  a  man's  rights  can  be  sufficiently  protected 
only  in  civil  society  is  not  a  reason  why  they  should 
be  entirely  subordinated  to  the  ends  of  society,  any 
more  than  the  employer's  dependence  upon  his  em- 
ployees puts  him  under  obligation  to  turn  over  to 
them  all  his  profits. 

Academic  opposition  to  the  doctrine  of  natural 
rights  is  directed  not  so  much  against  the  moderate 
conception  of  them  that  has  always  prevailed  in 
Catholic  ethical  teaching,  as  against  the  exaggerated 
and  anti-social  form  in  which  they  were  proclaimed 
by  the  political  philosophers  of  France,  and  even  by 
some  of  those  of  England  and  America,  in  the  latter 
half  of  the  Eighteenth  century.  The  Catholic  view, 
which  is  the  one  defended  in  this  chapter,  is,  as  al- 
ready noted,  that  the  individual's  natural  rights  are 
derived  from  and  determined  by  his  nature,  that  is 
to  say,  his  essential  constitution,  relations  and  end. 
They  are  also  said  to  proceed  from  the  natural  law, 
which  is  simply  that  portion  of  God's  eternal  law 
that  applies  to  actions  of  human  beings.  The  natur- 
al law  is  so  expressed  in  man's  nature  that  its  general 
precepts  may  readily  be  known,  partly  by  intuition 
and  partly  by  analyzing  man's  faculties,  tendencies 
and  destiny.  In  the  view  of  the  Revolutionary 
philosophers,  however,  "nature"  and  "natural"  re- 
ferred not  to  what  is  essential  and  permanent  in 
man,  but  to  that  which  is  primitive  and  unconven- 
tional.    Hence  they  laid  more  stress  on  the  "state 

62 


JUSTIFICATION    OF    RIGHTS 

of  nature"  than  on  the  "law  of  nature."  ^  The 
natural  law  was  merely  that  very  simple  and  very 
primitive  system  of  rules  that  would  suffice  for  the 
state  of  nature,  in  which  political  restraints  would 
be  unknown,  or  at  least  reduced  to  a  minimum.  As 
the  late  Professor  Ritchie  has  well  said:  "To  the 
Thomist-  the  law  of  nature  is  an  ideal  for  human 
law ;  to  the  Rousseauist  it  is  an  ideal  to  be  reached  by 
getting  rid  of  human  law  altogether."  ^  In  the  mind 
of  the  Revolutionist,  therefore,  to  re-establish  the  law 
of  nature  meant  to  shake  off  the  cumbersome  and  ob- 
structive political  regulations  of  the  day,  and  get 
back  to  the  simple  state  of  nature,  the  semi-anarchic- 
al conditions  of  primitive  times.  This  was,  of 
course,  a  very  inadequate  interpretation  of  man's 
nature  and  of  the  natural  law.  No  such  "state  of 
nature"  ever  existed  or  ever  could  exist  compatibly 
with  civilization.  No  valid  conclusion  regarding  the 
individual's  liberties,  duties  or  rights  could  be  de- 
duced from  his  position  and  relations  in  this  imagin- 
ary and  irrational  existence.  Nevertheless,  upon  it 
were  based  and  by  it  were  measured  men's  natural 
rights  in  the  Revolutionary  system.  As  a  conse- 
quence, the  rights  of  the  individual  were  exaggerated 
and  the  rights  of  society  minimized.  In  practice 
this  juristic  liberalism  has  meant,  and  always  will 
mean,  that  the  State  allows  to  the  strong  the  legal 
right  and  power  to  oppress  the  weak.  A  good  ex- 
ample of  the  evil  is  to  be  found  in  the  results  of  the 
economic  policy  of  laisses-faire.     It  is  no  wonder 

^  Cf.  Bonar,  "Philosophy  and  Political  Economy,"  p.  i86. 

*  And  the  Catholic  philosopher  generally. 

*  "Natural  Rights,"  p.  43. 

63 


A    LIVING    WAGE 

that  there  has  been  a  reaction  against  this  pernicious, 
anti-social  and  really  unnatural  theory  of  natural 
rights. 

The  doctrine  of  natural  rights  outlined  in  the  fore- 
going pages  holds,  then,  a  middle  ground  between 
the  Revolutionary  and  the  positivistic  theories  of 
the  origin  and  extent  of  the  rights  of  the  individual. 
It  insists  that  the  individual  is  endowed  by  nature, 
or  rather,  by  God,  with  the  rights  that  are  requisite 
to  a  reasonable  development  of  his  personality,  and 
that  these  rights  are,  within  due  limits,  sacred  against 
the  power  even  of  the  State ;  but  it  insists  that  no  in- 
dividual's rights  extend  so  far  as  to  prevent  the  State 
from  adjusting  the  conflicting  claims  of  individuals 
and  safeguarding  the  just  welfare  of  all  its  citizens.. 
In  other  words,  man's  natural  rights  must  not  be  sc 
wideiy  interpreted  that  the  strong,  and  the  cunning, 
and  the  unscrupulous  will  be  able,  under  the  pretext 
of  individual  liberty,  to  exploit  and  overreach  the 
weak,  and  simple,  and  honest  majority.  The  formula 
that  correctly  describes  the  limits  of  individual 
rights  is  not  the  one  enounced  by  Kant  and  Fichte, 
namely,  that  a  person  has  a  right  to  do  everything 
that  does  not  interfere  with  the  equal  liberty  of  oth- 
ers. ^  Interpreted  in  one  way,  this  formula  is 
utterly  incapable  of  application,  since  the  doing  of 
an  action  by  one  man  means  the  limitation  to  that 
degree  of  the  liberty  of  all  other  men.  Understood 
in  a  completely  subjective  sense,  it  would  justify 
and  legalize  theft,  adultery  and  murder;  for  I  may 

^  Seft  Kant's  "Metaphysik  der  Sitten,"  section  C,  and 
Fichte's  "Science  of  Rights,"  p.  i6i,  Kroeger's  translation. 

64 


JUSTIFICATION    OF    RIGHTS 

claim  the  right  to  steal  if  I  am  willing  that  others 
should  enjoy  the  same  liberty.  The  true  formula 
is,  that  the  individual  has  a  right  to  all  things  that 
are  essential  to  the  reasonable  development  of  his 
personality,  consistently  with  the  rights  of  others 
and  the  complete  observance  of  the  moral  law. 
Where  this  rule  is  enforced  the  rights  of  all  indi- 
viduals, and  of  society  as  well,  are  amply  and  reason- 
ably protected.  On  the  other  hand,  if  the  indi- 
vidual's rights  are  given  a  narrower  interpretation, 
if  on  any  plea  of  public  welfare  they  are  treated  by 
the  State  as  non-existent,  there  is  an  end  to  the  dig- 
nity of  personality  and  the  sacredness  of  human 
life.  Man  becomes  merely  an  instrument  of  the 
State's  aggrandizement,  instead  of  the  final  end  of 
its  solicitude  and  the  justification  of  its  existence. 
If  all  rights  are  derived  from  the  State,  and  deter- 
mined by  the  needs  of  the  State,  the  laborer  has  no 
such  thing  as  a  natural  right  to  a  Living  Wage,  nor 
any  kind  of  right  to  any  measure  of  wages,  except 
in  so  far  as  the  community  would  thereby  be  benefit- 
ed. President  Hadley  tells  us  that  some  workers 
are  more  profitable  at  a  low  wage  than  at  a  high 
one,  that  the  "economy  of  high  wages"  is  not  a 
universal  law.  "There  are  some  men  whose  maxi- 
mum efficiency  per  unit  of  food  is  obtained  with 
small  consumption  and  small  output.  These  go  into 
lines  requiring  neither  exceptional  strength  nor  ex- 
ceptional skill,  and  remain  poor  because  the  best 
commercial  economy  in  such  lines  is  obtained  by  a 
combination  of  low  output  and  low  consumption."  ^ 

^"Economics,"  section  363. 
5  65 


A    LIVING    WAGE 

Those  who  would  measure  the  rights  of  the  individ- 
ual by  the  social  weal  must  logically  conclude  that 
whenever  "the  best  commercial  economy"  is  secured 
by  "low  consumption,"  in  other  words,  by  low  wages, 
the  underpaid  worker,  let  him  be  never  so  cruelly 
"sweated,"  is  not  treated  unjustly  and  has  no  right 
to  a  larger  remuneration.  Hence  the  importance 
of  the  doctrine  of  rights  to  the  subject  of  this  vol- 
ume ;  for  it  cannot  be  shown  that  every  laborer  has 
an  ethical  claim  to  a  Living  Wage  unless  the  teach- 
ing of  Christianity  be  accepted,  to-wit :  "That  every 
individual  by  virtue  of  his  eternal  destination  is  at 
the  core  somewhat  holy  and  indestructible ;  that  the 
smallest  part  has  a  value  of  its  own,  and  not  merely 
because  it  is  part  of  a  whole :  that  every  man  is  to  be 
regarded  by  the  community,  never  as  a  mere  instru- 
ment, but  also  as  an  end."  ^ 

*  Gierke,  "Political  Theories  of  the  Middle  Age,"  p.  82. 


66 


CHAPTER  IV 


The  Right  to  Subsistence  and  the  Right  to  a 
Decent  Livelihood 

The  right  to  a  Living  Wage  is  derived  from  the  right 
to  live  from  the  bounty  of  the  earth.  The  latter  right  ac- 
knowledged by  most  nations  and  insisted  upon  by  Christi- 
anity. It  is  evident  from  a  view  of  man's  nature  and  his 
relation  to  the  earth.  It  is  superior  to  and  limits  the  right 
of  private  ownership.  Meaning  of  a  decent  livelihood.  Its 
rational  basis  is  the  sacredness  of  personality.  Men  have 
not  natural  rights  to  equal  amounts  of  goods ;  for  they  are 
unequal  both  in  individual  needs  and  productive  powers. 
Nor  rights  to  equal  satisfaction  of  the  totality  of  their 
needs.  Circumstances  by  which  the  right  to  a  decent  liveli- 
hood is  conditioned. 

According  to  the  argument  made  in  the  last  chap- 
ter, the  source  of  natural  rights  is  the  dignity  of  the 
human  person,  while  their  scope  is  determined  by 
the  person's  essential  needs.  A  man's  natural  rights 
are  as  many  and  as  extensive  as  are  the  liberties, 
opportunities  and  possessions  that  are  required  for 
the  reasonable  maintenance  and  development  of  his 
personality.  They  may  all  be  reduced  to  the  right 
to  a  reasonable  amount  of  external  liberty  of  action. 
Some  of  them,  for  instance,  the  rij^ht  to  live  and  the 
right  to  marry,  are  original  and  primary,  mhering 

(>7 


A    LIVING    WAGE 

in  all  persons  of  whatever  condition ;  others  are  de- 
rived and  secondary,  occasioned  and  determined  by 
the  particular  circumstances  of  particular  persons. 
To  the  latter  class  belongs  the  right  to  a  Living 
Wage.  It  is  not  an  original  and  universal  right; 
for  the  receiving  of  wages  supposes  that  form  of  in- 
dustrial organization  known  as  the  wage  system, 
which  has  not  always  existed  and  is  not  essential  to 
human  welfare.  Even  to-day  there  are  millions  of 
men  who  get  their  living  otherwise  than  by  wages, 
and  who,  therefore,  have  no  juridical  title  to  wages 
of  any  kind  or  amount.  The  right  to  a  Living  Wage 
is  evidently  a  derived  right  which  is  measured  and 
determined  by  existing  social  and  industrial  institu- 
tions. 

The  primary  natural  right  from  which  the  right 
to  a  Living  Wage  is  deduced,  is  the  right  to  subsist 
upon  the  bounty  of  the  earth.  All  people  have  given 
more  or  less  definite  adhesion  to  the  truth  that  the 
earth  is  the  common  heritage  of  all  the  children  of 
men.  Emil  de  Laveleye  and  Sir  Henry  Maine  tell 
us  that,  "originally  the  soil  belonged  in  common  to 
communities  of  kinsmen";  and  Clifife-Leslie,  speak- 
ing of  the  wild  herbs,  fruits,  berries  and  roots  which 
were  the  earliest  forms  of  property,  says :  "Individ- 
uals did  not  regard  these  as  their  own  absolute 
property,  but  as  part  of  the  common  fund  of  the 
community."  ^  Whatever  objections  may  lie  in  the 
way  of  the  theory  of  primitive  communism  in  land, 
the   facts   at   our   disposal   seem   to   indicate   that 

'  Introduction  to  Laveleye's  "Primitive  Property,"  pp.  vi, 
vii.     Cf.  Wallace's  "  Russia." 

68 


RIGHT    TO    SUBSISTENCE 

scarcely  any  community  has  regarded  as  thieves 
those  of  its  own  members  who  seized  their  neighbor's 
goods  as  a  last  resource  against  starvation.  This 
is  especially  true  of  the  nations  that  have  adopted 
the  moral  teachings  of  Christianity.  In  the  early 
centuries  of  the  Christian  era  the  task  of  providing 
for  the  poor  and  needy  was  accepted  and  recognized 
by  the  bishops  and  secular  clergy,  the  monasteries 
and  other  religious  institutions,  as  an  obligation  of 
legal  justice;  in  modern  times  it  is  most  frequently 
discharged  through  the  legislation  known  as  poor 
laws.  Underlying  these  various  practices  and  in- 
stitutions is  the  Christian  conviction  that  every  hu- 
man being  has  not  only  a  claim  in  charity,  but  a 
strict  right  to  as  much  of  the  wealth  of  the  com- 
munity as  is  necessary  to  maintain  his  life.  Such 
was  the  doctrine  of  the  early  Fathers  of  the  Church, 
and  such  has  been  the  doctrine  of  all  her  authorita- 
tive teachers  down  to  the  present  hour.  The  teach- 
ing of  Basil  in  the  East  and  Ambrose  in  the  West 
may  be  taken  as  representing  the  mind  of  all  the 
Fathers.  The  former  tells  the  rich  man  that  the 
superfluous  bread,  shoes  and  clothes  in  his  posses- 
sion belong  to  his  hungry  and  naked  neighbors, 
while  the  latter  declares  that  the  man  of  wealth  who 
gives  to  the  poor  is  not  bestowing  an  alms  but  pay- 
ing a  debt.  ^  The  greatest  of  the  theologians,  St. 
Thomas  Aquinas,  maintained  that  the  man  in  ex- 
treme need  who  had  no  other  resource  was  justified 
in  supplying  his  necessities  from  the  goods  of  his 
^  For  a  fairly  good  account  of  the  attitude  of  the  Fathers 
toward  private  property,  see  Capart,  "La  propriete  individuelle 
et  le  collectivisme." 

69 


A    LIVING    WAGE 

neighbor,  and  that  this  would  not,  properly  speaking, 
be  theft.  ^  Again,  he  says  it  is  well  that  property 
should  be  owned  privately,  but  that  the  use  of  it 
should  be  common,  so  that  all  persons  may  be  sus- 
tained out  of  its  abundance.  ^  In  this  statement  we 
have  undoubtedly  an  echo  and  development  of  the 
saying  of  Aristotle  that,  "it  is  best  to  make  property 
private  but  to  have  the  use  of  it  common."  ^ 

This  claim  of  the  individual  to  a  livelihood,  which 
seems  to  be  allowed  by  the  moral  convictions  of  all 
peoples,  and  which  is  explicitly  asserted  in  the 
Christian  teaching,  is  obviously  in  accord  with  the 
dictates  of  reason.  Since  all  persons  are  of  equal 
intrinsic  worth,  the  maintenance  of  life  is  of  equal 
intrinsic  importance  in  all.  Relatively  to  his  fellows, 
every  man  is  an  end  in  himself.  No  man  can  rea- 
sonably say  to  his  neighbors :  "My  life  is  superior  to 
yours,  more  sacred  than  yours,  and  your  faculties 
and  lives  ought  to  be  treated  as  mere  means  to  my 
welfare."  Nor  can  any  man  truthfully  assert  that 
there  is  anything  in  the  designs  of  God,  in  his  own 
nature,  or  in  the  nature  of  the  earth  that  would  jus- 
tify him  in  maintaining  that  his  right  to  the  earth's 
material  resources  is  superior  to  that  of  his  fellows. 
On  the  one  hand,  then,  we  have  the  fact  that  all  per- 
sons are  of  equal  dignity  and  their  lives  of  equal 
intrinsic  importance ;  on  the  other  hand,  we  see  that 
all  men  stand  on  the  same  footing  in  relation  to  the 
common  bounty  of  earth.  It  follows,  therefore, 
that  the  right  of  access  to  the  material  means  of  liv- 

*"Summa  Theologica,"  2a.  2ae.,  q.  66,  a.  7. 

'Ibid,  a.  2. 

•"Politics,"  Book  II,  ch.  V. 

70 


RIGHT    TO    SUBSISTENCE 

ing  is  as  important  and  as  valid  in  one  man  as  in 
another.  The  man  who  is  not  in  himself  in  extreme 
need  cannot  rightfully  debar  his  perishing  fellow 
man  from  the  goods  that  are  indispensable  to  the 
preservation  of  life. 

What  becomes,  according  to  this  doctrine,  of  the 
right  of  private  property,  and  of  the  recognized 
titles  thereto,  such  as  occupation,  inheritance,  labor, 
acquisition  by  contract,  etc.  ?  Suppose  the  starving 
man  wishes  to  take  some  of  the  bread  that  the  honest 
mechanic  has  bought  with  his  hard  earned  wages ! 
The  latter  may  meet  the  man  in  distress  with  the 
statement :  "Yes,  I  concede  that  you  have  by  nature, 
by  the  fact  that  you  are  a  human  being,  the  right  to 
acquire  and  use  property  and,  in  general,  to  live 
upon  the  fruits  of  the  earth ;  but  my  purchase  has 
given  me  a  particular  claim  to  this  particular  bread, 
a  specific  and  precise  right  against  which  your 
generic  and  vague  right  cannot  prevail."  The 
answer  to  this  contention  is  simple.  All  the  titles 
of  private  ownership  are  merely  reasons  or  causes 
why  a  person  can  validly  lay  claim  to  a  particular 
piece  or  article  of  private  property.  They  show 
why  the  good  in  question  belongs  to  the  present 
claimant  rather  than  to  any  other  owner;  but  they  do 
not  prove  the  validity  of  private  property  as  an  in- 
stitution. Private  ownership  of  the  earth's  resources 
is  right  and  reasonable  not  for  its  own  sake — which 
would  be  absurd — but  because  it  enables  men  to  sup- 
ply their  wants  more  satisfactorily  than  would  be 
possible  in  a  regime  of  common  property.  Hu- 
man needs  constitute  the  primary  title  both  of  com- 

71 


A    LIVING    WAGE 

mon  and  of  private  ownership.  Private  property 
is  morally  legitimate  because  it  is  the  method  that 
best  enables  man  to  realize  his  natural  right  to  use 
the  gifts  of  material  nature  for  the  development  of 
his  personality.  It  is,  therefore,  merely  a  means, 
and  its  scope  is  determined  and  limited  by  the  end 
which  it  promotes,  and  which  is  its  sole  justification. 
The  private  right  of  any  and  every  individual  must 
be  interpreted  consistently  with  the  common  rights 
of  all.  When  a  private  owner  encroaches  upon  the 
latter  he  cannot  justify  his  conduct  by  an  appeal  to 
the  authority  of  his  private  right ;  for  this  is  a  mere 
means  to  the  right  of  use,  and  his  right  of  use  ceases 
where  the  like  right  of  his  neighbor  begins.  Hence 
a  man's  right  to  a  superfluous  loaf  which  is  his  by 
a  title  of  private  ownership  does  not  absolve  him 
from  the  crime  of  injustice  when  he  withholds  it 
from  his  starving  fellow  man.  In  acting  thus  he 
treats  a  trifling  want  of  his  own,  namely,  the  desire 
to  continue  in  possession  of  that  loaf,  as  a  thing  of 
greater  worth  than  his  neighbor's  life.  He  uses  the 
common  bounty  of  nature  to  satisfy  an  unimportant 
want  at  the  expense  of  an  essential  want  in  a  being 
whose  life  is  as  sacred  and  as  valuable  as  his  own. 
As  this  use  of  goods  is  unreasonable,  so  is  the  means 
by  which  it  is  accomplished,  namely,  an  undue  ex- 
tension and  unwarranted  interpretation  of  the  right 
of  private  property. 

So  much  for  the  right  to  subsistence,  to  a  bare 
livelihood.  By  a  decent  livelihood  is  meant  that 
amount  of  the  necessities  and  comforts  of  life  that  is 
in  keeping  with  the  dignity  of  a  human  being.     It 

72 


RIGHT    TO    SUBSISTENCE 

has  no  precise  relation  to  the  conventional  stand- 
ard of  living  that  may  prevail  w^ithin  any  social  or 
industrial  class,  but  describes  rather  that  minimum 
of  conditions  which  the  average  person  of  a  given 
age  or  sex  must  enjoy  in  order  to  live  as  a  human 
being  should  live.  It  means,  in  short,  that  smallest 
amount  of  subsistence  goods  which  is  reasonable, 
becoming,  appropriate  to  the  dignity  of  a  person. 
The  content  of  this  right  will  be  stated  in  detail  here- 
after ■;  at  present  let  us  say  that  if  a  man  is  to  live  a 
becoming  life  he  must  have  the  means,  not  merely 
to  secure  himself  against  death  by  starvation  and 
exposure,  but  to  maintain  himself  in  a  reasonable 
degree  of  comfort.  He  is  to  live  as  a  man,  not  as 
an  animal.  He  must  have  food,  clothing  and  shelt- 
er. He  must  have  opportunity  to  develop  within 
reasonable  limits  all  his  faculties,  physical,  intellec- 
tual, moral  and  spiritual.  The  rational  ground  of 
this  right  is  the  same  as  that  of  the  right  to  subsist- 
ence. It  is  the  dignity  and  essential  needs  of  the 
person.  Those  means  and  opportunities  that  have 
just  been  described  as  a  decent  livelihood  are  the 
minimum  conditions  of  right  and  reasonable  living, 
since  without  them  man  cannot  attain  to  that  ex- 
ercise of  his  faculties  and  that  development  of  his 
personality  that  makes  his  life  worthy  of  a  human 
being.  When  he  is  compelled  to  live  on  less  than 
this  minimum  he  is  treated  as  somewhat  less  than  a 
man.  If  it  be  asked.  What  proof  can  be  given  that  a 
person  really  possesses  this  right  to  a  decent  liveli- 
hood? the  answer  must  be  that  proof  in  the  strict 
sense  is  impossible.     If  it  is  not  self-evident,  none 

73 


A    LIVING    WAGE 

of  man's  natural  rights  are  self-evident,  and  the 
dignity  of  personality  is  a  delusion.  All  that  a  de- 
fender of  any  of  these  rights  can  do  is  to  offer  what 
Mill  called  ''considerations  which  induce  the  mind 
to  accept."  The  only  argument  that  can  be  adduced 
for  the  right  to  live  is  that  the  sacredness  of  person- 
ality is  violated  when  one  man  uses  the  life  of  an- 
other as  a  mere  means  to  his  own  welfare.  Simi- 
larly a  man's  dignity  is  outraged  when  he  is  deprived 
of  the  opportunity  to  live  a  reasonable  life,  in  order 
that  some  other  man  or  men  may  enjoy  the  super- 
fluities of  life.  A  decent  livelihood  is  just  as  truly 
an  essential  need  of  man,  is  just  as  absolutely  de- 
manded by  his  intrinsic  dignity,  as  subsistence,  or 
security  of  life  and  limb.  In  all  these  rights  the 
vital  and  ultimate  consideration  is  the  intrinsic  worth 
of  the  person.  If  this  be  ignored,  if  the  principle 
that  every  man  is  an  end  in  himself  be  rejected  in 
the  case  of  the  claim  to  a  decent  livelihood,  it  can 
logically  be  ignored  where  life  itself  is  at  stake ;  for 
the  difference  between  these  rights  and  between  the 
needs  to  which  they  respond  is  one  of  degree  not  of 
kind.  Now,  since  a  reasonable  life  and  the  reason- 
able development  of  personality  are  of  equal  intrinsic 
importance  in  all  human  beings,  the  fruits  of  the 
earth,  the  common  heritage,  ought  to  be  distributed 
in  such  a  way  that  this  end  will  be  realized.  Conse- 
quently when  any  person  is  hindered  from  obtaining 
access  on  reasonable  terms  to  this  minimum  of  ma- 
terial goods  his  dignity  and  rights  are  violated,  and 
some  other  man  or  men,  or  some  social  institution, 
has  committed  an  act  of  injustice. 

74 


RIGHT    TO    SUBSISTENCE 

Why  content  ourselves,  it  may  be  asked,  with  the 
assertion  that  men  have  equal  rights  merely  to  a 
decent  livelihood?  Since  the  earth  was  created  for 
all,  and  since  men  are  equal  in  personal  dignity, 
have  they  not  a  natural  right  to  equal  amounts  of  the 
products  of  the  earth?  The  first  answer  to  these 
questions  consists  in  an  appeal  to  that  very  consider- 
ation of  equal  justice  which,  superficially  regarded, 
seems  to  demand  an  equal  division.  Although  men 
are  equal  in  personal  dignity,  they  are  unequal  in 
their  individual  powers  and  needs.  Equal  generic- 
ally,  they  are  unequal  individually.  The  quantity 
that  would  constitute  a  decent  livelihood,  or  any 
other  given  level  of  living,  for  one  man,  would  mean 
now  more  and  now  less  than  this  level  in  the  case  of 
other  men.  So  that  even  if  the  ideal  of  distributive 
justice  were  that  social  condition  in  which  all  men 
would  have  the  requisites  of  precisely  equal  degrees 
of  life  and  development,  the  quantity  necessary  for 
this  purpose  would  vary  according  to  the  varying 
constitutions  and  peculiarities  of  the  individuals. 
All  that  any  man  could  justly  demand  would  be  the 
amount  that  made  this  degree  of  life  possible  for 
him.  With  regard  to  their  content,  therefore,  the 
equality  of  rights  is  proportional  not  arithmetical. 

Another  objection  to  the  method  of  absolute  equal- 
ity in  distribution  arises  out  of  the  principle  of  pro- 
ductivity. The  conviction  is  well-nigh  universal 
that  a  man  has  a  right  to  all  that  he  produces.  Any 
one  not  in  extreme  need  who  seizes  the  results  of 
another's  labor  is  everywhere  regarded  as  a  robber 
or  a  thief.     And  this  judgment  seems  to  be  entirely 

75 


A    LIVING    WAGE 

correct.  Certainly  it  is  true  of  those  cases  in  which 
the  producer,  using  materials  which  are  his  by  some 
valid  title  of  ownership,  turns  out  a  product  unassist- 
ed. Upon  this  product  his,  and  only  his,  personality 
is  impressed,  and  it  is  difficult  to  see  on  what  ground, 
save  that  of  dire  need,  any  portion  of  it  can  be 
claimed  by  anyone  else.  The  same  principle  would 
seem  to  hold  in  a  lesser  degree  with  regard  to  the 
joint  product  of  a  number  of  associated  workers 
whose  productive  contributions  have  been  unequal. 
Those  who  have  produced  most  are,  it  would  seem, 
entitled  to  the  largest  share  of  the  product.  It  is  not 
necessary,  nor  even  proper,  that  they  should  be 
awarded  in  full  proportion  to  their  productivity — for 
the  reasonable  needs  and  the  efforts  or  sacrifices  of 
the  other  workers  constitute  superior  titles — but  they 
ought  to  receive  something  more  than  the  less  effi- 
cient contributors.  Mr.  John  A.  Hobson  says  that  so- 
ciety must,  as  a  matter  of  expediency,  recognize  in  its 
members  some  kind  of  right  to  "all  that  portion  of  a 
product  necessary  to  evoke  the  effort  to  produce  it."^ 
It  is  true  that  society  will  do  well  to  pay  exceptional 
rewards  in  order  to  obtain  exceptional  services,  but 
this  necessity  under  which  society  labors  does  not  of 
itself  confer  upon  the  doers  of  such  services  a  right 
to  unusual  remuneration,  any  more  than  the  condi- 
tions which  compel  a  weaker  nation  to  pay  tribute 
to  a  stronger  create  a  right  in  the  latter  to  receive 
and  retain  such  payments.  Social  expediency  is 
frequently  nothing  more  than  forced  toleration  of 
something  essentially  evil.  Independently,  how- 
^The  Social  Problem,  pp.  105,  106. 
76 


RIGHT    TO    SUBSISTENCE 

ever,  of  the  attitude  of  society,  superior  productive 
power  does  seem  to  give  rise  to  some  sort  of  title  to 
superior  rewards,  and  therefore  to  refute  the  claims 
of  arithmetical  equality. 

But  if  man's  needs  constitute  the  primary  and  most 
urgent  title  of  ownership,  and  should  be  taken  as 
the  sole  rule  of  distribution  up  to  the  point  where 
all  men  are  provided  with  a  decent  livelihood,  why 
not  apply  the  same  principle  to  all  the  needs  that 
clamor  for  satisfaction  and  all  the  goods  that  are  to 
be  distributed?  Since  men  are  of  equal  worth,  does 
not  ideal  justice  require  that  they  should  be  enabled 
to  supply  the  totality  of  their  needs  in  equal  degrees  ? 
Is  it  just  that  one  man  smoke  cigars,  while  his 
neighbor,  with  the  same  human  nature  and  the 
same  tastes,  is  compelled  to  content  himself  with 
cheap  tobacco  and  a  clay  pipe  ?  One  answer  to  these 
questions  is  found  in  the  claims  of  the  principle  of 
productivity  as  outlined  in  the  preceding  paragraph. 
The  man  who  produces  more  wealth  or  other  forms 
of  social  utility  than  his  fellow  producers  acquires 
some  kind  of  right  to  a  greater  reward,  independ- 
ently of  the  extent  or  intensity  of  his  needs.  Again, 
some  of  the  producers  make  greater  efforts  and 
greater  sacrifices  than  others ;  and  a  large  part  of 
the  world's  productive  resources  is  already  held  by 
legitimate  titles  of  private  ownership,  such  as  oc- 
cupation, inheritance  and  contract.  Superior  sac- 
rifices undergone  in  the  production  of  social  utilities 
create  a  claim  to  superior  remuneration;  and  the 
recognized  titles  of  private  ownership,  when  not  ex- 
tended beyond  reasonable  limits,  are  valid  because 

n 


A    LIVING    WAGE 

they  are  in  accordance  with  deep  and  universal 
human  needs.  They  confer  upon  their  holders  some 
right  to  the  fruits  of  the  productive  goods  thus 
owned.  Finally,  the  needs  that  remain  after  a  decent 
livelihood  has  been  obtained  by  all,  ought,  as  a  matter 
of  social  zvelfare  and  of  concrete  justice,  to  be  satis- 
fied unequally,  inasmuch  as  men  who  can  make  a 
good  use  of  the  non-essential  goods  ought  to  obtain 
more  of  them  than  men  who  are  incapable  of  any  so- 
cially useful  work.  All  of  these  considerations  of  pro- 
ductivity, sacrifice,  existing  private  property,  and 
capacity  for  public  service,  modify  the  claims  of  the 
principle  of  needs,  and  have  to  be  taken  into  account 
in  formulating  a  completely  just  system  of  distribu- 
tion. 1 

It  does  not  follow,  however,  that  the  man  who 
has  no  private  productive  property,  and  whose 
efficiency  and  sacrifices  in  production  are  only  ordi- 
nary, will  never  have  a  right  to  more  than  the 
minimum  that  constitutes  a  decent  livelihood.  If 
this  were  true  the  just  wage  and  the  Living  Wage 
would  mean  the  same  thing  for  the  great  majority, 
and  only  the  few  would  have  a  right  to  the  means  of 
progressing  beyond  the  bare  essentials  of  a  reason- 
able existence.  But  to  set  forth  the  requirements 
of  full  and  exact  justice  in  the  distribution  of  goods 
is  happily  not  the  object  of  this  book.  It  is  con- 
cerned only  with  the  minimum  that  will  satisfy  the 
claims  of  right;  hence  the  present  contention  is 
merely  that  a  person  has  a  right  to  at  least  a  decent 

^A  very  interesting  and  penetrating  discussion  of  the  dif- 
ferent canons  of  distribution  is  found  in  Willoughby's  "Social 
Justice,"  pp.  107-215. 

78 


RIGHT    TO    SUBSISTENCE 

livelihood.  It  has  been  said  above  that  this  is  a 
right  of  access  to  the  appropriate  goods  "on  reason- 
able terms."  This  phrase  suggests  the  limitations 
of  the  right.  It  is  not  of  such  a  pressing  nature  as 
the  right  to  subsistence,  and  therefore  does  not  justi- 
fy the  taking  of  private  property,  even  when  there 
is  no  other  available  means  of  securing  its  realiza- 
tion. It  is,  moreover,  limited  by  the  actual  condi- 
tions of  production  and  distribution.  Subsistence 
goods  are  not  as  a  rule  provided  by  nature  in  the 
precise  forms  suitable  to  human  use.  The  raw  ma- 
terial of  living  is  present  in  abundance,  but  the  fin- 
ished consumption  goods  must  be  furnished  by 
labor.  They  cannot  be  obtained  by  a  simple  stretch- 
ing forth  of  one's  hand.  "In  the  sweat  of  thy  face 
thou  shalt  eat  thy  bread,"  is  the  great  law  of  life 
which  in  some  form  is  binding  upon  all.  It  must  be 
obeyed,  up  to  the  limit  of  reasonable  exertion,  by  all 
who  would  make  good  their  claims  to  a  decent  live- 
lihood. As  all  should  be  enabled  to  realize  the  right, 
so  all  should  fulfil  the  conditions  upon  which  it  de- 
pends. On  the  other  hand,  the  concrete  existence 
of  the  right  in  all  supposes  that  the  total  amount  of 
goods  to  be  distributed  is  sufficiently  large  to  afford 
a  decent  livelihood  for  all.  Where  both  of  these 
conditions  are  realized  the  individual's  right  will  be 
valid  in  general  against  the  society  of  which  he  forms 
a  part;  for,  to  quote  the  words  of  Prince  Liechten- 
stein of  Austria:  "Labor  is  not  merely  a  matter  of 
the  private  order ;  it  is  a  kind  of  function  delegated 
by  society  to  each  member  of  the  body  politic.  The 
peasant  who  cultivates  his  field,  the   artisan  who 

79 


A    LIVING    WAGE 

works  in  a  manufactory,  are,  so  far  as  society  is 
concerned,  functionaries,  just  as  much  as  the  govern- 
ment clerk  in  his  office,  or  the  soldier  on  the  field  of 
battle.  Industrial  labor  creates,  like  every  other 
function,  a  series  of  reciprocal  obligations  between 
the  society  which  provfdes  it  and  the  worker  who 
executes  it."  ^  The  right  holds  in  particular  against 
the  person  or  the  industrial  or  social  institution  to 
whom  society  has  transferred  the  function  of  dis- 
tribution, and  on  whom  the  actual  relations  of  men 
and  the  practical  harmonizing  and  just  interpretation 
of  the  natural  rights  of  all,  dictate  that  the  obliga- 
tion should  rest. 

*  Quoted  in  Lilly's  "First  Principles  in  Politics,"  pp.   loi, 


80 


CHAPTER  V 


The  Right  to  an  Individual  Living  Wage 

Various  ways  of  defending  the  Living  Wage  principle. 
The  maintenance  of  industrial  efficiency :  theory  not  fully 
convincing,  and  it  ignores  the  laborer's  personal  dignity. 
The  theory  of  an  equivalent  for  expended  energy  is  inconclu- 
sive. The  principle  of  just  price  demands  equality  of  gain 
for  the  two  exchangers,  and  a  corresponding  formulation  of 
values  and  prices.  In  the  opinion  of  the  Schoolmen,  thi^ 
was  best  accomplished  through  the  medium  of  the  social 
estimate.  Upon  this  doctrine  of  just  price  some  writers 
try  to  base  the  right  to  a  Living  Wage.  Criticism  of  the 
doctrine  in  its  theoretical  and  practical  aspects,  and  con- 
clusion it  cannot  serve  as  a  foundation  for  this  right. 
Some  remarks  on  the  general  validity  of  the  doctrine  of 
just  price.  The  theory  that  the  laborer's  right  to  a  Living 
Wage  is  merely  the  concrete  form  of  his  right  to  a  decent 
livelihood.  The  former  right  holds  against  the  members 
of  the  community  in  which  the  laborer  lives,  notwithstand- 
ing the  complexity  of  modern  industry  and  current  ex- 
aggeration of  the  right  of  private  ownership.  A  truer 
view  prevailed  in  medieval  society;  and  occasionally  finds 
expression  to-day.  The  wage-rights  of  women  and 
children. 

It  is  the  purpose  of  this  chapter  to  show  that  the 
workingman's  right  to  a  decent  livelihood  is,  in  the 
present  economic  and  political  organization  of 
society,  the   right  to  a  Living  Wage.     The  term 

6  8i 


A    LIVING    WAGE 

"workingman"  is  taken  to  describe  the  adult  male  of 
average  physical  ability  who  is  dependent  exclusively 
upon  the  remuneration  that  he  is  paid  in  return  for 
his  labor.  And  "an  individual  Living  Wage"  means 
that  amount  of  remuneration  that  is  sufficient  to 
maintain  decently  the  laborer  himself,  without  refer- 
ence to  his  family.  At  the  close  of  the  chapter  a 
word  will  be  said  concerning  the  wage-rights  of 
women  and  children. 

The  advocates  of  the  Living"  Wage  doctrine  do 
not  all  reach  their  common  conclusion  by  the  same 
process  of  reasoning.  Some  of  them  base  it  on  the 
social  benefit  to  be  derived  from  maintaining  the 
workers  in  a  condition  of  the  highest  industrial 
efficiency;  others,  on  the  manifest  justice  of  giving 
a  man  sufficient  to  repair  the  energy  that  he  expends 
in  his  labor;  others,  on  the  "common  estimate"  of 
what  constitutes  a  just  price  for  work;  and  still  oth- 
ers, on  the  personal  dignity  of  the  laborer,  or  his 
right  to  possess  the  requisites  of  a  decent  human 
life. 

Prominent  among  those  who  defend  the  principle 
of  a  minimum  wage  on  social  grounds  are  Sidney 
and  Beatrice  Webb,  and  their  line  of  argument  is 
typical  of  that  large  class  of  writers  who  habitually 
regard  the  rights  and  welfare  of  the  individual  from 
the  viewpoint  of  society.  ^  They  maintain  that  the 
State  ought  to  enforce  a  national  minimum  of  wages 
which  would  provide  the  laborer  with  "the  food, 
clothing  and  shelter  physiologically  necessary,  ac- 
cording to  national  habit  and  custom,  to  prevent 

*  See  "Industrial  Democracy"   ist  edition,  pp.  766-784. 
82 


A    PERSONAL    LIVING    WAGE 

bodily  deterioration."  By  this  means  the  community 
would  rid  itself  of  the  industrial  evil  called  "parasit- 
ism," that  is,  the  existence  of  trades  or  businesses 
in  which  the  wages  paid  are  too  low  to  maintain  the 
workers  in  industrial  efficiency,  and  to  enable  them 
to  reproduce  and  rear  a  sufficient  number  to  take 
their  places.  These  industries  take  from  the  nation's 
capital  stock  of  character,  intelligence  and  energy 
more  than  they  give  back,  and  therefore  steadily  de- 
grade the  character  and  industrial  efficiency  of  the 
whole  people.  Hence,  as  a  matter  of  simple  pro- 
tection to  the  national  life,  both  present  and  future, 
this  practice  ought  to  be  prohibited,  and  all  workers 
ought  to  be  given,  through  appropriate  legal  meas- 
ures, sufficient  remuneration  to  maintain  their  pro- 
ductive power. 

Admitting  the  premises,  this  conclusion  is  obvious- 
ly correct,  but  it  is  only  partially  satisfactory  to  any- 
one who  regards  the  laborer  primarily  as  a  being 
endowed  with  a  personality  and  rights  of  his  own. 
Like  every  other  person,  he  exists  primarily  for  him- 
self, not  for  society ;  and  he  has  rights  that  are  de- 
rived from  his  own  essential  and  intrinsic  worth, 
and  whose  prim.ary  end  is  his  own  welfare.  Society 
exists  for  the  individual,  not  the  individual  for 
society,  and  when  there  is  question  of  fundamental 
rights  and  interests  the  good  of  the  individual,  that 
is,  of  all  the  individuals,  should  be  the  supreme  con- 
sideration. Social  welfare  when  taken  as  an  ideal 
of  effort  entirely  apart  from  the  welfare  of  the  par- 
ticular individuals  of  whom  society  is  composed,  is 
either  an  empty  abstraction  or,  concretely,  the  wel- 

83 


A    LIVING    WAGE 

fare  of  a  portion  only  of  its  members — the  strongest, 
or  most  efficient,  or  most  intelligent.  Individual 
rights  ought,  indeed,  to  be  interpreted  consistently 
with  the  legitimate  interests  of  society,  but  this  is 
only  another  way  of  saying  that  no  person's  rights 
should  be  extended  so  far  as  to  violate  the  rights  of 
other  persons;  for  the  vital  fact  about  injury  to 
society  is  always  that  some  wrong  is  done  to  a  group 
of  human  beings.  And,  despite  the  alleged  evils  of 
"parasitism,"  it  is  quite  conceivable  that  in  some 
contingencies  social  utility  would  be  promoted  by 
paying  some  of  the  least  efficient  workers  a  wage  in- 
sufficient to  repair  expended  energy  or  to  bring  out 
their  highest  productive  effort.  The  nation,  like 
the  individual  employer,  might  find  it  profitable  to 
wear  out  quickly  a  portion  of  its  productive  power. 
The  difference  between  the  product  of  some  laborers 
at  bare  subsistence  wages  and  at  a  wage  adequate  to 
replace  their  outlay  of  energy  and  evoke  their  fullest 
productivity,  might  not  equal  the  difference  in  re- 
muneration. In  such  cases  the  attempt  to  obtain 
the  highest  industrial  efficiency  would  be  economic- 
ally unprofitable.  No  doubt  the  advocates  of  the 
view  here  criticized  are  too  humane  to  conclude  that 
society  is  justified  in  seeking  its  own  utility  at  the 
cost  of  inhumanity  to  any  section  of  its  members. 
They  would  probably  insist  that  this  course  would 
in  the  long  run  be  productive  of  more  harm  than 
good,  owing  to  the  resulting  moral  deterioration. 
With  this  contention  the  defender  of  natural  rights 
would  agree,  since  he  holds  that  true  and  permanent 
social  utility,  economic,  moral  and  spiritual,  can  be 

84 


A    PERSONAL    LIVING    WAGE 

secured  only  by  a  general  observance  of  the  mora\ 
law  and  the  law  of  rights  as  deduced  from  the 
essential  nature  of  man ;  but  he  would  insist  that  the 
doctrine  which  derives  the  laborer's  claim  to  a  decent 
livelihood  from  considerations  of  social  utility  is  not 
only  unsound  in  theory  but  extremely  dangerous  in 
practice.  Once  this  view  becomes  general,  the  con- 
dition of  the  "sweated  classes"  will  be  even  more 
hopeless  than  it  is  to-day ;  for  only  the  few  are  cap- 
able of  perceiving,  or  anxious  to  secure,  what  will 
be  beneficial  to  society  "in  the  long  run."  The 
many  will  see  only  the  apparent  social  utility  of  cheap 
goods  and  cheap  services. 

The  Rev.  Charles  Antoine,  S.  J.,  declares  that 
there  ought  to  be  an  objective  equivalence  between 
the  labor  performed  and  the  wage  received.  ^  That 
is  to  say,  the  laborer's  remuneration  must  be  suffi- 
cient to  replace  the  energy  that  he  has  put  forth  in  the 
service  of  his  employer,  and  this  as  a  matter  not  of 
social  welfare  but  of  individual  rights.  While  this 
formula  has  a  certain  show  of  exact,  rigorous  justice, 
it  can  be  interpreted  and  applied  in  such  a  way  that 
the  "equivalent"  compensation  will  be  less  than  a 
Living  Wage.  For  the  energy  expended  by  the 
laborer  is  replaced,  substantially,  as  long  as  he  con- 
tinues to  work  with  his  accustomed  efficiency.  Any 
wage  that  is  uniform  from  day  to  day  will  provide 
him  with  the  material  means  of  realizing  this  end. 
The  fact  is  that  the  amount  of  energy  expended  by 
the  laborer  who  is  wholly  dependent  upon  his  wages, 
is  always  limited  by  his  wages,  can  never  be  in  excess 

^"Cours  d'economie  sociale,"  p.  6oi. 
85 


A    LIVING    WAGE 

of  them.  The  subsistence  received  by  the  men  and 
women  employed  in  sweat  shops  does  not  repair  a 
large  amount  of  energy,  but,  on  the  hypothesis  that 
they  continue  at  work,  it  replaces  all  that  they  actu- 
ally expend.  The  rule  that  Father  Antoine  proposes 
cannot  be  made  the  basis  of  a  change  for  the  better, 
since  it  is  even  now  in  force  throughout  the  world 
of  industry.  In  fact,  it  would  work  very  well  side 
by  side  with  "the  iron  law  of  wages." 

Other  writers  derive  the  right  to  a  Living  Wage 
from  the  principle  of  just  price.  Following  the 
Schoolmen,  they  maintain  that  for  every  com- 
modity, whether  goods  or  labor,  that  men  buy  and 
sell,  there  is  a  price  that  is  just  and  fair.  ^  It  is  the 
price  at  which  the  things  exchanged  will  be  equal. 
Now  the  equality  that  may  exist  between  economic 
goods  can  be  nothing  else  but  an  equality  of  utility.^ 
And  this  equality  is  to  be  understood,  not  absolute- 
ly, in  the  sense  that  both  exchangers  will  derive  the 
same  amount  of  satisfaction  from  the  goods  received, 
but  relatively  to  the  inconvenience  that  each  suffers 
by  depriving  himself  of  the  good  transferred.  ^  It 
was  as  obvious  to  the  Schoolmen  as  it  is  to  us,  that 
in  every  economic  exchange  both  parties  make  a 
gain,  or  think  they  do — otherwise  the  transaction 
could  never  take  place.  The  utility  that  each  obtains 
from  the  thing  received  is  greater  than  he  would  have 
enjoyed  by  continuing  in  possession  of  the  thing 

*  Cf.  Rev.  A.  Vermeersch,  S.  J.,  "Quaestiones  de  Justitia," 
theses,  25,  28,  29. 

^  Cf.  Victor  Brants,  "Les  theories  economiques  aux  xiiie 
et  xive  siecles,"  p.   193,  sq. 

^  Cf.  St.  Thomas,  "Summa  Theologica,"  2a.  2ae.,  q.  77,  a.  i. 

86 


A    PERSONAL    LIVING    WAGE 

parted  with.  Now,  justice  requires  that  these  net 
gains  should  be  the  same  for  both  sides.  Such  is  the 
precise  and  commonly  accepted  meaning  of  the 
scholastic  formula:  "In  an  onerous  contract  the  two 
parties  should  be  benefited  equally."  It  is  held  to 
be  a  deduction  from  the  personal  equality  of  all 
human  beings.  Men  have  equal  rights,  not  only  to 
subsist  upon  and  acquire  the  fruits  of  the  earth,  but 
to  profit  by  the  exchange  of  such  goods  as  they  have 
legitimately  acquired.  ^ 

Since  the  price  of  goods  is  merely  their  value  ex- 
pressed in  terms  of  money,  their  value  must  always 
be  so  assessed  and  determined  that  the  price  will  be 
just — that  both  parties  will  obtain  the  same  quantity 
of  net  advantage.  Understood  in  this  sense,  the 
value  of  things  is  primarily  an  ethical  attribute.  It 
is  measured  and  formulated  with  reference,  not 
merely  to  economic  facts,  but  to  this  objective  moral 
standard  of  equality  of  gain.^  If  the  gains  resulting 
from  the  exchange  of  one  coat  for  two  pairs  of  shoes 
are  unequal  the  goods  have  not  been  rightly  valued, 
and  the  contract  is  not  in  accordance  with  ideal 
justice.  In  a  word,  justice  is  not  realized  by  ex- 
changing commodities  at  any  valuation  that  the 
contracting  parties  see  fit  to  put  upon  them,  nor  at 
any  other  valuation  whatever,  except  the  one  that  is 
just,  the  just  price. 

*  Cf.  Rev,  A.  Castelein,  S.  J.,  "Philosophia  Moralis  et 
Socialis,"  p.  208. 

*  While  criticizing  the  scholastic  doctrine  of  just  price,  on 
the  ground  that,  as  he  incorrectly  assumes,  it  took  no  account 
of  the  factor  of  human  desire,  M.  Gabriel  Tarde  adopts  in  so 
many  words  the  scholastic  formula  of  contractual  justice.  That 

87 


A    LIVING    WAGE 

Who  is  to  ascertain  and  fix  this  just  value  of  things 
in  actual  transactions  ?  Not  those  who  make  the  ex- 
change, for  they  are  liable  to  form  prejudiced  esti- 
mates, and  the  stronger  bargainer  will  be  tempted  to 
use  his  power  at  the  expense  of  the  weaker.  In  the 
opinion  of  the  Schoolmen,  the  valuation  could  be 
most  reasonably  and  justly  determined  by  the  com- 
munity. They  admitted,  indeed,  that  the  just  price 
of  goods  was  incapable  of  exact  determination,  and 
consisted  in  a  "certain  estimate"  or  approximation 
("quadam  aestimatione").  Hence,  they  said,  it  is 
susceptible  of  three  grades,  lowest,  medium  and 
highest,  all  of  which  are  legitimate  as  rules  of  prac- 
tical justice.  This  method  of  social  appraisal  seemed 
to  them  to  be  a  fairly  satisfactory  device,  inasmuch 
as  it  reduced  the  influence  of  the  individual  bias  and 
individual  selfishness  (against  which  the  whole  doc- 
trine of  just  price  was  directed)  to  a  minimum.  Nor 
was  the  community  to  act  arbitrarily  in  arriving  at 
its  common  estimate;  it  was  morally  bound  to  take 
into  account  certain  objective  factors,  chiefly,  the 
cost  of  production,  the  scarcity,  and  the  general 
utility  of  the  goods  appraised.  Thus  formulated, 
the  "social  estimate"  was  always  the  proximate  deter- 
minant of  just  price. 

Upon  this  doctrine  the  writers  whom  we  are  now 
considering  base  the  laborer's  right  to  a  Living 
Wage.  Their  argument  runs  thus  :  the  workingman 
has  a  right  to  a  just  price  for  his  labor ;  the  just  val- 
uation of  any  kind  of  labor  is  that  formed  by  the  com- 

price,  he  says,  will  be   just,   "qui    donnerait  une   satisfaction 
egale  aux  deux."     "Psychologic  economique,"  II.  p.  44. 


A    PERSONAL    LIVING    WAGE 

mon  estimate,  or  social  judgment,  of  what  is  reason- 
able; now  the  social  judgment  declares  that  a  man's 
wages  ought  never  to  be  less  than  the  equivalent  of 
a  decent  livelihood;  consequently,  the  just  price  of 
labor  is  never  less  than  a  Living  Wage. 

The  defenders  of  this  view  are  careful  to  point  out 
that  the  social  estimate  to  which  they  refer  is  not  the 
economic  social  estimate.  The  latter  is  determined 
solely  by  the  movement  of  demand  and  supply,  is 
produced  unconsciously,  by  the  "higgling  of  the 
market,"  and  is  always  expressed  in  actual  market 
prices.  The  ethical  estimate  is  a  deliberate  pro- 
nouncement of  the  social  judgment,  made  independ- 
ently of  the  price-determining  action  of  competition. 
It  declares  the  prices  and  wages  that  ought  to  exist, 
not  those  that  do  exist.  In  this  sense  the  social 
estimate,  we  are  told,  maintains  that  when  men  are 
paid  less  than  a  Living  Wage  they  are  victims  of 
injustice.  ^ 

In  considering  the  bearing  of  the  doctrine  of  just 
price  upon  that  of  a  Living  Wage,  we  must  dis- 
tinguish between  its  objective  and  subjective  aspects. 
Equality  of  gain  for  the  two  exchangers  is  the  ob- 
jective standard  of  ideal  justice;  while  the  subjec- 
tive application  of  the  abstract  rule  to  the  concrete 
facts  of  industry  is  found  in  the  social  estimate, 
which  is  assumed  to  be  the  best  available  expression 
of  the  requirements  of  practical  justice.  Now,  our 
contention  is  that  neither  the  ideal  standard  nor  the 

^  For  an  explanation  of  the  difference  between  the  scholas- 
tic theory  of  just  price  and  a  modern  theory  of  economic  value, 
the  reader  is  referred  to  chapter  II ;  references  to  authorities 
on  the  former  theory  will  also  be  found  there. 

89 


A    LIVING    WAGE 

method  of  applying  it  affords  a  satisfactory  logical 
basis  for  the  Living  Wage  principle. 

The  criterion  of  equal  gains  for  the  two  parties  to 
an  economic  exchange  would  seem,  at  first  sight, 
to  possess  all  the  requisites  of  a  correct  rule  of 
justice.  Inasmuch  as  men  are  endowed  with  equal 
rights  to  acquire  the  resources  of  the  earth,  it  seems 
reasonable  to  conclude  that  when  two  of  them  enter 
into  a  contract  for  the  exchange  of  goods  that  they 
have  lawfully  acquired — a  contract  in  which  neither 
intends  to  enact  the  role  of  a  philanthropist,  but 
both  wish  to  gain  as  much  as  possible — they  have  a 
right  to  equal  quantities  of  gain.  As  we  saw  in  the 
last  chapter,  equal  rights  to  the  earth  do  not,  indeed, 
imply  rights  to  equal  amounts  of  it  or  its  products ; 
but  this  is  owing  to  the  existence  of  other  titles  of 
ownership,  such  as  superior  needs,  efforts  and 
productivity,  which  modify  the  content  of  the  pri- 
mary and  fundamental  title.  No  such  considera- 
tions stand  in  the  way  of  men's  rights  to  equal  gains 
from  the  exchange  of  their  goods.  When  we  look 
deeper,  however,  we  find  that  there  are  other  and 
very  good  reasons  for  rejecting  this  standard  of 
equal  gains.  In  the  first  place,  there  is  the  difficulty 
of  putting  it  into  practice.  No  statement  of  a  just 
price  in  terms  of  money  can  be  formulated  which 
will  enable  the  two  contracting  parties  to  make  equal 
gains  in  the  case  of  any  good  that  is  frequently 
bought  and  sold.  Different  men  may  purchase  the 
same  article  from  the  same  merchant  at  the  same 
rate,  and  yet  the  personal  advantage  will  not  be  the 

90 


A    PERSONAL    LIVING    WAGE 

same  for  all  of  them.  ^  According  to  the  theory  that 
we  are  discussing,  all  the  buyers  ought  to  profit  to 
the  same  extent,  provided  that  the  merchant's  gains 
on  all  the  transactions  are  equal.  And  the  chances 
of  inequality  are  increased  when  the  purchasers  deal 
with  different  sellers.  The  situation  is  the  same 
when  the  commodity  dealt  in  is  human  labor.  It  is 
morally  impossible  to  appoint  a  rate  of  wages  from 
which  the  employer  and  every  employee  will  obtain 
the  same  amount  of  net  utility. 

Not  only  is  this  standard  impracticable  (except  by 
an  approximation  so  broad  as  to  render  it  superflu- 
ous), but  in  a  large  proportion  of  cases  it  is  unsound 
theoretically.  For  example,  the  man  who  gives  his 
last  dime  to  a  prosperous  baker  for  a  loaf  of  bread, 
gains  far  more  by  the  transaction  than  does  the 
baker.  The  profit  made  by  the  latter  is  very  small, 
say,  one  cent,  and  represents  the  satisfaction  of  a 
very  trifling  want.  The  other  party  to  the  contract 
has  stilled  the  keenest  pangs  of  hunger,  and  possibly 
warded  off  imminent  starvation.  Any  other  utility 
that  he  might  have  procured  for  his  dime  is,  in  com- 
parison with  the  one  that  he  really  obtained,  insig- 
nificant. Consequently,  the  utility  of  the  bread  to 
him,  whether  considered  in  itself  or  relatively  to  any 
other  good  that  he  might  have  got  for  his  money,  is 
much  greater  than  the  advantage  accruing  to  the 
baker.  And  yet  no  one  would  assert  that  in  the 
ordinary  conditions  of  production  ten  cents  is  not  a 
sufficiently   large   price   for   a   loaf   of   bread.     In 

*  Cf.  J.  A.  Hobson,  "The  Economics  of  Distribution,"  chap. 
I;  Tarde,  op.  cit.,  pp.  10-22. 

91 


A    LIVING    WAGE 

accordance  with  a  well  known  law  of  value,  the 
utility  of  a  good  to  an  individual  is  always  propor- 
tioned to  the  importance  and  intensity  of  the  want 
that  it  satisfies ;  hence  the  more  dissimilar  the  mate- 
rial conditions  of  the  exchangers,  the  more  will  the 
gain  of  the  poorer  exceed  that  of  the  richer.  If  the 
two  are  to  gain  equally  the  poorer  man  must  pay  a 
price  that  all  fair-minded  persons  would  regard  as 
outrageously  exorbitant.  Only  in  contracts  between 
persons  whose  incomes  are  substantially  equal  does 
the  rule  of  equality  or  gains  seem  to  accord  with  our 
everyday  conceptions  of  justice.  When,  for  in- 
stance, a  shoemaker  gives  a  tailor  a  pair  of  shoes  in 
return  for  a  pair  of  trousers,  their  gains  are  about 
equal,  since  the  wants  supplied  are  nearly  equal  in 
importance.  The  inequality  that  we  are  discussing 
is  even  more  striking  and  more  frequent  in  labor 
contracts.  No  matter  how  low  the  wage,  the  labor- 
er gains  more  than  the  employer.  The  man  who 
works  for  seventy-five  cents  a  day  satisfies  in  some 
fashion  his  most  important  and  intense  wants.  Com- 
pared with  this  result  the  pain-cost  of  the  exertion 
that  he  puts  forth  is  quite  small.  The  net  advantage 
that  he  derives  from  the  contract  is,  therefore,  very 
large;  whereas  the  employer's  profit  is  a  small 
amount  of  money  which,  in  a  great  many  cases, 
represents  a  few  cigars  or  some  equally  secondary 
utility.  According  to  the  equal  gain  principle,  the 
laborer  is  getting  more  than  is  just,  although  his 
remuneration  is  far  below  the  limit  of  a  Living 
Wage.  As  a  general  rule,  the  employer  who  has 
any  considerable  number  of  men  on  his  pay  roll  does, 

92 


A    PERSONAL    LIVING    WAGE 

indeed,  obtain  from  the  aggregate  of  his  wage-con- 
tracts more  utility — a  greater  satisfaction  of  wants 
both  intensively  and  extensively — than  any  one  of 
his  employees,  but  his  gain  is  less  than  the  total  gains 
of  all  of  them ;  and  in  any  one  contract  it  is  smaller 
than  the  advantage  received  by  the  other  party,  the 
laborer. 

As  a  matter  of  fact,  the  Schoolmen  never  made 
any  consistent  attempt  to  apply  the  principle  of 
equality  of  gains  to  industrial  contracts.  When 
they  declared  that  the  community,  or,  more  precise- 
ly, those  members  of  it  whose  reputation  for  fairness 
was  highest,  was  the  most  competent  agency  to 
determine  the  concrete  price  that  would  safeguard 
equality  between  buyer  and  seller,  they  also  de- 
clared, as  we  have  seen  above,  that  the  decision  of 
the  community,  the  social  estimate,  ought  to  be 
based  upon  the  general  utility,  the  relative  supply, 
and  the  cost  of  production  of  the  commodity.  Now 
,these  are  objective  factors,  but  they  are  in  no  sense 
an  expression  or  interpretation  of  the  objective 
standard  of  equality  of  gains.  A  price  fixed  in  ac- 
cordance with  them  would  not  always — would  never, 
perhaps — enable  both  exchangers  to  obtain  the  same 
amount  of  profit.  Hence  the  Schoolmen's  working 
criterion  of  just  price  implies  a  complete  setting 
aside  of  their  ideal  standard.  Indeed,  their  insist- 
ence on  the  cost  of  production  as  one  of  the  deter- 
minants of  the  just  price  of  goods  was  a  recognition 
of  the  principle  of  a  Living  Wage ;  for  cost  of  pro- 
duction in  medieval  industry  was  labor  cost,  the  just 
measure  of  which  was  the  customary  needs  of  the 

93 


A    LIVING    WAGE 

class  performing  the  labor.  "With  the  canonists, 
this  idea  of  class  duties  and  class  standard  of  com- 
fort is  either  explicitly  or  implicitly  referred  to  as 
final  test  in  every  question  of  distribution  or  ex- 
change. Thus  Langenstein — who,  after  being  vice- 
chancellor  of  the  University  of  Paris,  was  called  to 
teach  at  the  New  University  of  Vienne  in  1384 — lays 
down  that  everyone  can  determine  for  himself  the 
just  price  of  the  wares  he  may  have  to  sell,  by  simply 
reckoning  what  he  needs  in  order  to  suitably  support 
himself  in  his  rank  of  life."  ^  Thus,  the  Schoolmen 
measured  the  just  price  by  a  Living  Wage,  instead 
of  basing  the  latter  upon  the  former. 

So  much  for  the  theoretical  standard :  the  practic- 
al criterion,  the  "social  estimate,"  is  unsatisfactory, 
either  as  a  justification  or  as  a  measure  of  the  Liv- 
ing Wage.  To  begin  with,  it  is  too  vague.  Does 
it  describe  the  unanimous,  or  morally  unanimous, 
judgment  of  the  community — what  the  older  writers 
called  the  "sensus  communis"  ?  or,  is  it  another  name 
for  "public  opinion"  ?  Does  it  mean  custom  ?  Possibly 
it  refers  to  the  deliberate  judgment  of  a  body  of  men 
chosen  from  the  various  classes,  intellectual,  in- 
dustrial and  religious,  of  the  community.  Let  us 
see  whether  any  of  these  social  estimates  will  serve 
to-day  as  a  working  rule  of  industrial  justice. 

The  first  of  them  undoubtedly  sanctions  the  prin- 
ciple of  a  Living  Wage.  Our  knowledge  of  the 
average  man's  moral  beliefs  entitles  us  to  assume 

^Ashley,  op.  cit.,  II,  p.  391;  cf.  Brants,  op.  cit.,  p.  119, 
where  the  text  and  reference  are  given ;  and  Janssen, 
"Geschichte  des  deutschen  Volkes,"  I,  p.  447. 

94 


A    PERSONAL    LIVING    WAGE 

that  he  holds,  at  least  in  the  abstract,  that  the  laborer 
ought  to  have  the  means  of  living  comfortably  and 
decently.  But  concerning  the  amount  of  subsist- 
ence goods  comprised  in  the  idea  of  a  decent  liveli- 
hood, the  "sensus  communis"  lacks  definiteness. 
The  best  that  it  can  give  us  is  a  compromise  derived 
from  a  multitude  of  individual  or  class  estimates. 
We  have,  however,  no  means  of  ascertaining  the 
content  of  this  compromise,  or  average  estimate, 
and,  even  if  we  had,  we  cannot  be  certain  that  it 
would  be  in  harmony  with  reason  and  justice.  In 
judging  of  the  larger  and  more  general  questions  of 
morality,  the  common  convictions  of  mankind  are 
sufficiently  trustworthy ;  but  in  details  its  judgment 
is  easily  perverted  by  the  influence  of  bad  and  long 
established  custom. 

Second,  that  somewhat  capricious  form  of  the 
social  estimate,  called  public  opinion,  is  vitiated  by 
defects  similar  to  those  just  enumerated.  Its  ver- 
dict concerning  the  precise  requisites  of  a  Living 
Wage  will  necessarily  be  too  general,  and  too  diffi- 
cult of  ascertainment.  It  is,  moreover,  essentially 
variable  and  therefore  untrustworthy.  Indeed,  if 
we  accept  the  press  as  its  mouthpiece  we  must  admit 
that  it  has  not  declared  in  favor  of  even  the  princi- 
ple of  a  Living  Wage. 

In  the  third  place,  it  is  undoubtedly  true  that  a 
fairly  definite  standard  of  industrial  justice  is  found 
in  custom ;  but  it  is  not  a  reliable  standard.  The 
custom  of  our  time  approves  of  wages  that  are  insuf- 
ficient to  afl^ord  the  conditions  of  a  decent  liveli- 
hood— witness  the  remuneration  of  the  "sweated" 

95 


A    LIVING    WAGE 

classes.  As  we  saw  in  Chapter  II,  the  canonist, 
Reiffenstuel,  accepted  custom  as  a  criterion,  and  ar- 
rived at  the  conclusion  that  justice  did  not  require  a 
man's  wages  to  be  equivalent  to  a  decent  livelihood. 

Finally,  the  pronouncement  of  a  carefully  selected 
and  representative  committee  would,  it  is  probable, 
be  sufficiently  definite  and  trustworthy.  If  the  social 
estimate,  thus  understood,  declared  that  every  laborer 
ought  to  have  a  Living  Wage,  and  defined  what  it 
meant  by  this  phrase,  its  decision  would  probably 
satisfy  all  reasonable  minds,  and  be  the  nearest  ap- 
proach to  a  correct  estimate  of  a  Living  Wage  that 
is  practically  attainable.  Since,  however,  no  such 
judicial  body  exists,  its  assumed  pronouncements 
cannot  be  made  to  serve  as  the  basis  of  the  Living 
Wage  doctrine. 

The  theory  which  founds  a  Living  Wage  upon  the 
principle  of  just  price  has  been  discussed  at  this 
length  because  the  concepts  and  formulas  underly- 
ing it  dominated  the  industrial  theory  and  practice 
of  Europe  for  centuries,  and  because  they  are  still 
quite  common  in  ethical  literature.  One  after  an- 
other the  Schoolmen  of  the  Middle  Ages  asserted 
and  expounded  the  principle  that  goods  and  labor 
had  a  certain  just  price.  And  they  were  right;  for 
when  we  admit  that  a  commodity  can  be  sold  at  an 
exorbitant  price  we  tacitly  assume  that  it  has  some 
other  price  which  is  not  exorbitant,  which  is  just. 
An  action  cannot  be  adjudged  wrong  except  by 
reference  to  some  standard  of  right.  The  precise 
determination  of  that  standard  is  another  matter. 
The    Schoolmen's   theoretical   formulation   of   it— 

96 


A    PERSONAL    LIVING    WAGE 

equality  of  benefit  or  gain  for  buyer  and  seller — is 
undoubtedly  a  particular  application  of  the  general 
principle  that,  since  men  are  by  nature  equal,  justice 
regards  them  as  essentially  equal  in  relation  to  their 
property,  and  demands  that  whenever  private  prop- 
erty changes  hands  (except  in  the  case  of  gifts) 
equality  should  be  maintained  between  the  thing 
parted  with  and  the  thing  received  in  return. 
"Aequalitas  rei  ad  rem,"  was  the  scholastic  phrase,  i 
According  to  this  principle,  property  that  has  been 
unjustly  taken  away  must  be  restored  to  the  owner 
in  its  integral  self  or  in  its  equivalent ;  and,  secondly, 
in  free  exchanges  the  thing  received  should  be 
equivalent  to  the  thing  transferred.  This  general 
statement  is  correct,  expresses,  in  fact,  the  very 
essence  of  abstract  justice  between  man  and  man; 
but,  as  we  have  seen,  "equality  between  the  things 
exchanged"  cannot  consistently  with  distributive 
justice  be  translated  into  "equal  gains  for  the  ex- 
changers." ^  We  have  seen,  too,  that  the  Schoolmen 
never  made  any  practical  use  of  this  theoretical  in- 
terpretation of  equality ;  and  we  may  be  pardoned 
the  wish  that  certain  modern  writers  would  discard, 
not  only  it,  but  certain  kindred  phrases  and  concepts^ 
that  are  equally  ambiguous  and  misleading.  A 
French  economist,  M.  Charles  Perin,  has  observed 
that  many  theological  writers  have  hesitated  to  ac- 
cept the  reasoning  of  Pope  Leo's  encyclical,  accord- 

*  See    Costa-Rosetti,    "Philosophia    Moralis,"   thesis    107, 

*  In  fact,  it  may  be  laid  down  as  a  general  principle  that  the 
reciprocal  gains  ought  to  be  unequal  whencTcr,  and  to  the  ex- 
tent that,  such  inequality  will  reasonably  offset  or  correct 
previously  existing  inequality  between  the  two  parties. 

7  97 


A    LIVING    WAGE 

ing  to  which  the  minimum  just  wage  is  based  upon 
the  laborer's  dignity  as  a  person,  and  measured  by 
his  essential  needs.  ^  Apparently  they  dislike  to  part 
with  traditional  modes  of  expression,  and  so  con- 
tinue to  repeat  the  old  formulas  about  the  laborer's 
right  to  a  remuneration  that  is  the  "worth,"  or 
"equivalent,"  or  "value,"  of  his  labor.  In  so  far  as 
these  statements  are  true,  they  are  truisms ;  in  so  far 
as  they  have  any  concrete,  serviceable  meaning  they 
are  not  true.  If,  for  example,  the  word  value  be 
taken  in  the  sense  of  the  actual  economic,  or  market, 
value  of  labor,  the  statement  in  question  becomes 
equivalent  to  the  assertion  that  the  laborer  is  justly 
treated  whenever  he  receives  the  wages  that  are  as- 
signed to  him  by  supply  and  demand,  even  though 
these  may  lie  on  the  borderland  of  starvation,  if 
moral  value  is  meant  the  statement  is  correct,  but 
not  very  illuminating,  since  it  suggests  no  method 
of  estimating  the  moral  value  of  labor  in  terms  of 
livelihood  or  wages.  As  to  the  practical  interpreta- 
tion of  just  price  provided  in  the  social  estimate,  it 
seems  to  have  served  very  well  for  the  small  com- 
munities and  simple  economic  relations  of  the  Middle 
Ages.  2  When  masters  and  men  lived  together  in  a 
relationship  "like  unto  that  of  fathers  and  sons"; 
when  the  whole  body  of  consumers  and  producers 
who  were  interested  in  arranging  a  scale  of  wages 
and  prices  was  found  within  the  limits  of  a  small 
town ;  when  the  classes  of  goods  and  services  that 
were  to  be  appraised  were  few  in  number  and  simple 

^  "Premiers    principes    d'economie    politique,"    2d    edition, 

pp.  389,  390- 

*Cf.  Ashley,  "Economic  History,"  I,  p.  138. 

98 


A    PERSONAL    LIVING    WAGE 

in  character ;  and  when  the  standard  of  Hving  was 
nearly  uniform  throughout  the  community — in  these 
circumstances  the  "communis  aestimatio"  of  the 
just  price  of  labor  was  apt  to  be  more  or  less  precise, 
and  could  be  readily  made  manifest  to  all  concerned. 
Moreover,  the  social  estimate  often  became  crystal- 
lized into  custom.  It  was,  therefore,  not  only  defin- 
ite and  patent,  but  more  or  less  constant  during  long 
periods  of  time.  And,  since  it  was  formed  under 
the  immediate  and  powerful  influence  or  moral  and 
religious  teaching,  it  was  in  fairly  close  conformity 
with  ethical  ideals.  ^  As  a  working  rule  of  fair 
dealing,  it  is  even  to-day  valid  in  principle;  for  it 
implies  the  essence  of  the  arbitration  idea,  a  disin- 
terested body  of  judges:  but  it  stands  in  need  of  a 
new  and  more  precise  formulation.  Its  limitations, 
too,  must  be  kept  in  mind :  it  is  not  an  absolute  but 
a  subjective  expression  of  right;  and  it  must,  as  the 
Schoolmen  insisted,  always  take  account  of  certain 
objective  factors,  among  which  are  man's  natural 
rights  to  life,  liberty,  and  a  becoming  amount  of  the 
comforts  of  life. 

Finally,  we  come  to  the  doctrine  which  deduces 
the  laborer's  right  to  a  Living  Wage  from  his  per- 
sonal dignity  and  his  right  to  a  decent  livelihood.  ^ 
It  has  been  shown  in  the  last  chapter  that,  on  account 

^  Cf.  Ashley,  op.  cit.,  II,  388. 

'  Cf.  Rev.  A.  Pettier,  "de  Jure  et  Justitia,"  pp.  220-265  ; 
Verhaegen,  "le  minimum  de  salaire" ;  Pope  Leo  XIII,  in 
"Rerum  Novarum" :  "The  preservation  of  life  is  the  bounden 
duty  of  each  and  all,  and  to  fail  therein  is  a  crime.  It  follows 
that  each  one  has  a  right  to  procure  what  is  required  in  order 
to  live  ;  and  the  poor  can  procure  it  in  no  other  way  than  by 
their  wages." 

99 


A    LIVING    WAGE 

of  his  sacredness  as  a  person,  every  member  of  a 
community  has  an  abstract  right  to  a  decent  HveH- 
hood,  and  that  this  right  becomes  concrete  and  actual 
when  the  material  goods  controlled  by  the  commun- 
ity are  sufficient  to  provide  such  a  livelihood  for  all, 
and  when  the  individual  performs  a  reasonable 
amount  of  useful  labor.  It  is  assumed  that  the  first 
condition  is  verified ;  and  it  is  maintained  that  the 
second  is  fulfilled  by  the  man  who  labors  for  hire 
during  a  working  day  of  normal  length.  His  general 
right  to  as  much  of  the  earth's  fruits  as  will  furnish 
a  decent  livelihood  is  clear;  the  correlative  obliga- 
tion of  his  fellow  members  of  the  community  to  ap- 
propriate and  use  the  common  bounty  of  nature  con- 
sistently with  this  right,  ought  to  be  equally  clear. 
Now,  the  simple  and  sufficient  reason  why  this 
general  right  of  the  laborer  takes  the  special  form  of 
a  right  to  a  Living  Wage,  is  that  in  the  present  in- 
dustrial organization  of  society,  there  is  no  other 
way  in  which  the  right  can  be  realized.  He  cannot 
find  a  part  of  his  livelihood  outside  of  his  wages  be- 
cause there  are  no  unappropriated  goods  within  his 
reach.  To  force  him  to  make  the  attempt  would  be 
to  compel  him  to  live  on  less  than  a  reasonable  min- 
imum. And  the  obligation  of  paying  him  this 
amount  of  wages  rests  upon  the  members  of  the  in- 
dustrial community  in  which  he  lives ;  for  they  have 
so  appropriated  the  resources  of  nature,  and  so  dis- 
tributed the  opportunities  and  functions  of  industry, 
that  he  can  effectively  realize  his  natural  right  of 
access  to  the  goods  of  the  earth  only  through  the 
medium    of  wages.     As  long,    therefore,   as   the 

100 


A    PERSONAL    LIVING    WAGE 

present  organization  of  industry  exists,  the  obligation 
of  not  hindering  the  laborer  from  enjoying  his  right 
to  a  decent  livelihood  will  be  commuted  into  the 
obligation  of  paying  him  a  Living  Wage. 

The  right  to  a  Living  Wage  is  asserted  to  be  valid 
against  "the  members  of  the  community  in  which  the 
laborer  lives."  Whether  the  term  "members"  refers 
merely  to  the  employers,  or  to  other  persons  as  well, 
or  to  the  community  in  its  civil  capacity,  that  is,  the 
State,  will  be  fully  discussed  in  later  chapters.  For 
the  present  it  is  sufficient  to  point  out  that  tke  right 
exists,  and  that  it  holds  against  those  who  are  re- 
sponsible for  converting  the  laborer's  opportunity  of 
getting  a  living  into  the  opportunity  of  receiving 
wages.  "The  industrial  community  in  which  the 
laborer  lives"  can  be  defined  only  approximately.  It 
describes  that  section  of  the  world's  inhabitants  with 
which  the  laborer  comes  into  somewhat  close  eco- 
nomic relations,  chiefly,  those  who  are  primarily 
benefited  by  his  labor,  and  those  who  have  appro- 
priated that  portion  of  the  earth's  resources  that 
otherwise  would  be  practically  within  his  reach. 
Evidently  these  classes  or  persons  are  under  obli- 
gations of  justice  toward  the  laborer  that  are  shared 
only  slightly,  if  at  all,  by  men  living  on  another  con- 
tinent. The  latter  may,  indeed,  have  been  benefi- 
ciaries of  the  laborer's  toil,  but  they  cannot  practical- 
ly do  anything  toward  securing  to  him  a  Living 
Wage,  beyond  paying  a  fair  price  for  his  product; 
besides,  they  are  under  more  pressing  industrial  obli- 
gations toward  their  immediate  neighbors.  It  is 
also  true  that  they  have  appropriated  some  of  the 

lOI 


A    LIVING    WAGE 

common  bounty  of  nature  to  which  the  laborer  on 
the  other  side  of  the  globe  has,  as  one  of  the  children 
of  men,  an  indefinite  birthright;  owing,  however,  to 
the  intervening  distance,  they  have  not  vitally  in- 
terfered with  the  realization  of  this  right.  Men's 
rights  and  obligations  respecting  their  common 
heritage  of  material  goods  must  be  applied  and 
interpreted  with  a  reasonable  regard  to  their  various 
conditions  of  place,  possession,  ability,  and  oppor- 
tunity. 

One  of  the  principal  reasons  why  the  right  to  a 
Living  Wage  has  been  obscured  in  the  minds  of 
many  men,  is  the  complexity  of  modern  economic  life. 
An  example  or  two  will  illustrate  this  contention. 
Let  us  suppose  that  six  men  settle  upon  a  no-man's 
land,  and  proceed  to  divide  it  amongst  them.  Al- 
though it  is  capable  of  affording  a  comfortable  liveli- 
hood for  all  six,  five  of  them — an  undoubted  majority 
— organize  a  government,  and  divide  the  land  in  such 
a  way  that  the  portion  allotted  to  the  sixth  will  barely 
keep  him  alive.  Each  of  the  other  five  is  thus  enabled 
to  enjoy  something  more  than  a  decent  livelihood. 
Now,  it  is  safe  to  say  that  ninety-nine  of  one  hundred 
men  would  condemn  this  proceeding  as  unjust. 
They  would  maintain  that  the  right  of  the  sixth  man 
to  the  whole  amount  of  land  distributed  was  just  as 
good  as  the  right  of  any  of  the  others,  and  that  no 
reason,  title,  or  justification  existed  for  depriving 
him  of  an  equal  share,  when  that  much  was  essential 
to  a  decent  livelihood.  Imagine,  now,  a  company  of 
fifty  men  taking  up  their  abode  on  a  territory  that  no 
man  has  previously  visited  or  claimed.     Instead  of 

102 


A    PERSONAL    LIVING    WAGE 

dividing  up  the  land,  they  till  it  in  common,  and  dis- 
tribute its  produce.  Not  all  of  them,  however,  labor 
upon  the  soil ;  there  is  a  shoemaker,  a  weaver,  a  tail- 
or, a  carpenter,  and  so  on ;  every  man  performs  the 
task  for  which  he  is  best  fitted.  But  the  distribution 
of  their  common  product  is  so  carried  out  that  forty- 
five  can  live  in  abundance,  while  the  remaining  five 
have  merely  the  means  of  continuing  to  exist  and 
work.  The  services  of  these  latter,  so  the  other  fi/e 
assert,  are  not  worth  more  than  this  pittance.  Again 
it  is  palpable  that  the  common  product  of  a  common 
property  has  been  unjustly  apportioned  by  the  arbi- 
trary action  of  the  majority ;  for  the  five,  we  assume, 
perform  a  reasonable  amount  of  useful  labor.  The 
case  is  precisely  the  same,  at  least  in  principle,  in 
the  more  complex  and  elaborate  industrial  conditions 
of  to-day :  the  members  of  a  community  who  are  in 
control  of  its  land  and  resources,  violate  the  laborer's 
right  to  live  decently  out  of  the  common  bounty  of 
nature  when  they  so  take  advantage  of  the  existing 
distribution  of  private  property  as  to  deny  him  a 
Living  Wage.  In  exercising  their  right  of  access 
to  the  earth,  they  make  it  impossible  for  the  laborer 
to  exercise  his  as  fully  as  is  demanded  by  decency 
and  justice.  And  they  do  it  just  as  effectively,  they 
are  as  truly  responsible  for  the  laborer's  inability  to 
enjoy  his  natural  right,  as  the  greedy  and  arbitrary 
majority  in  the  above  mentioned  examples.  For 
the  laborer,  generally  speaking,  is  as  little  able  to 
change  his  location  as  are  the  harshly  treated  mem- 
bers of  those  two  isolated  communities.  A  few 
workingmen  could,  indeed,  find  a  living  elsewhere, 

103 


A    LIVING    WAGE 

but  the  overwhelming  majority  must  stay  where  they 
are,  or  merely  exchange  places  with  one  another, — . 
unless  the  whole  machinery  of  industry  is  to  stop, 
and  mankind  to  perish  off  the  face  of  the  earth. 
The  controllers  of  the  industries  and  material  re- 
sources of  a  community  cannot  get  along  without 
wage-workers;  rather  than  make  the  attempt,  they 
would  gladly  pay  every  one  of  them  a  Living  Wage ; 
which  is  a  clear  indication  that  they  regard  the 
laborer  as  really  worth  that  amount.  Hence  the 
complexity  of  the  present  industrial  system  obscures, 
but  in  no  way  annuls,  either  the  rights  of  the  laborer, 
or  the  correlative  obligations  of  his  fellow  citizens. 

Another  cause  of  the  prevailing  indifference  to- 
ward these  rights  and  obligations  is  ignorance  and 
neglect  of  the  common,  or  social,  aspect  of  property. 
All  too  general  is  the  notion  sanctioned  by  the  defi- 
nitions of  property  in  the  Roman  Law  and  in  the 
Civil  Code  of  France,  that  a  man  has  a  right  to  do 
with  his  own  what  he  pleases.  ^  Such  a  claim  Is 
obviously  absurd,  since  men  have  not  a  right  to  do 
as  they  like  with  their  faculties,  to  say  nothing  of 
the  bounty  of  nature  which  was  created  for  the  bene- 
fit of  all.  They  have  a  right  to  do  with  their  own 
only  that  which  is  consistent  with  the  rights  of  others. 
The  private  proprietor  too  often  forgets  that  his  right 
of  ownership  is  valid  only  as  a  rneans  to  his  right  of 
use,  and  that  the  latter  is  a  right  common  to  all  man- 
kind, which  he  is  obliged  to  interpret  and  exercise 
within  such  limits  that  its  realization  shall  be  possible 

Cf.    "Propriete,    capital,    et    travail,"    by    L'Abbe    Naudet, 
pp.  29-31. 

104 


A    PERSONAL    LIVING    WAGE 

for  his  fellow  men  likewise.  He  forgets  that  when 
he  appropriates  a  portion  of  the  earth's  resources  for 
his  own  use  and  benefit  he  diminishes  by  that  much 
the  amount  available  for  private  ownership  by  the 
rest  of  men.  He  forgets  that  his  less  fortunate 
neighbors,  among  whom  must  be  counted  the  laborers, 
have,  on  account  of  their  inborn  right  of  access  to 
the  world's  material  goods,  some  sort  of  claim  to 
that  part  thereof  which  he  caMs  his  own.  The  ex- 
aggeration of  the  scope  of  individual  ownership,  and 
of  the  ability  of  the  propertyless  man  to  take  care  of 
himself  in  the  competitive  struggle,  has  converted 
into  a  maxim  of  business  ethics  the  contention  that 
employer  and  employee  have  no  property  rights 
against  each  other  except  those  expressly  named  in 
the  labor  contract.  The  fact  that  a  contract  may 
be  the  occasion  of  a  right  which  it  does  not  explicit- 
ly provide  for,  is  entirely  overlooked.  It  is  for- 
gotten that  the  laborer  enters  the  wage-contract  as 
a  man  endowed  with  a  natural  and  indestructible 
right  to  a  decent  livelihood,  which  the  contract 
renders  impossible  of  realization  except  through  the 
medium  of  wages.  His  right  to  a  Living  Wage  is 
merely  the  former  right  as  modified  and  determined 
by  the  contract.  In  so  far  as  it  is  valid  against  his 
employer,  it  is  produced  neither  by  his  contract  with 
the  latter  nor  by  his  right  to  a  decent  livelihood, 
taken  separately,  but  by  the  two  in  conjunction. 

A  truer  and  more  humane  conception  of  the  re- 
lation between  the  right  of  individual  ownership  and 
the  right  of  use,  and  of  the  duties  of  the  private 
proprietor,  was  developed  and  fostered  in  medieval 
los 


A    LIVING    WAGE 

society.  The  Christian  doctrine  that  private  owner- 
.ship  is  not  an  absolute  right,  but  merely  a  form  of 
stewardship,  according  to  which  the  individual  holds 
his  wealth  from  God  and  is  obliged  to  administer  it 
for  the  benefit  of  others,  as  well  as  of  himself,  was 
more  frequently  preached,  and  more  generally  and 
vitally  accepted  than  it  is  to-day.*  In  the  thirteenth 
century,  we  find  Pope  Clement  IV  permitting 
strangers  to  occupy  and  till  the  third  part  of  any 
estate  which  the  proprietor  refused  to  put  under 
cultivation  himself.  Pope  Sixtus  IV,  in  the  fif- 
teenth century,  made  the  same  regulation  with  re- 
gard to  domains  in  the  Papal  territory.  ^  Here  we 
have  a  clear  recognition  of  the  principle  that  a  man 
has  not  a  right  to  do  what  he  pleases  with  his  own, 
but  only  that  which  is  consistent  with  the  right  of 
common  ownership  in  his  needy  neighbors.  Every 
man  performing  a  function  in  the  medieval  organ- 
ization of  industry,  the  lord  of  the  land,  the  free 
tenant,  the  villain,  the  serf,  the  merchant,  the  master- 
craftsman,  the  journeyman,  the  apprentice,  was 
regarded  as  rendering  a  social  service.  In  return 
for  this  contribution  to  the  community,  the  indi- 
vidual had  a  right,  according  to  medieval  theory, 
to  security  in  his  position  or  status,  and  to  the  means 
of  living  in  conformity  with  the  customs  of  his 
social  rank.  ^  This,  again,  was  merely  the  doctrine 
of  man's  right  to  a  living  from  the  bounty  of  the 
earth,  applied  to  the  conditions  of  medieval  society. 

*Cf.  Cunningham,  "Western  Civilization,"  II,  pp.   104-107. 
'^  Cf .  Naudet,  op.  cit.,  pp.  35,  36. 

^  Cf.   Weiss,   "Apologie  des   Christenthums,"   IV,   368,  sq. ; 
Ashley,  "English  Economic  History,"  II,  pp.  389-393- 

106 


A     PERSONAL    LIVING    WAGE 

Concrete  assertions  of  the  same  principle  are  heard 
to-day  in  the  claim  of  the  laborer  that  he  has  a  right 
to  work  and  a  right  to  the  job  that  he  has  held  for 
a  considerable  time;  in  the  conviction  of  the  em- 
ployer that  his  workmen  commit  an  act  of  injustice 
when  they  arbitrarily  quit  work;  and  in  the  conten- 
tion of  the  independent  dealer  or  manufacturer 
that  he  has  a  right  to  the  business  of  which  he  is 
deprived  by  the  practice  of  temporary  underselling 
pursued  by  the  trust.  The  principle  underlying  all 
these  beliefs,  medieval  and  modern,  is  that  formu- 
lated by  Aristotle  as  a  canon  of  social  expediency, 
"it  is  best  to  have  property  private,  but  to  make  the 
use  of  it  common"  ;  and  by  Aquinas  as  a  requirement 
of  justice,  "it  is  right  that  the  ownership  of  goods 
should  be  private,  but  the  use  of  them  ought  to  be 
common,  so  that  the  owner  may  readily  minister 
therefrom  to  the  needs  of  others." 

To  the  objection  that  some  laborers  possess  other 
means  of  living  in  addition  to  their  labor  power, 
the  answer  is  that  these  are  rather  rare  exceptions. 
Whether  they  also  have  a  right  to  a  Living  Wage, 
is  of  comparatively  small  importance.  Still  it 
would  seem  that  the  question  ought  to  be  answered 
in  the  affirmative,  since  they  perform  as  much  labor 
as  their  less  fortunate  fellows.  At  any  rate,  there 
are  good  social  reasons  for  paying  them  as  much  as 
is  received  by  the  other  workers  of  their  group. 

A  word  will  not  be  out  of  place  concerning  the 

wage-rights    of    women   and   children.     According 

to  the  foregoing  reasoning,  it  is  evident  that  those 

women  who  are  forced  to  provide  their  own  suste- 

107 


A    LIVING    WAGE 

nance  have  a  right  to  what  is  a  Living  Wage  fof 
them.  Since  they  have  no  other  way  of  living  but 
by  their  labor,  the  compensation  therefore  should 
be  sufficient  to  enable  them  to  live  decently.  Again, 
women  doing  the  same  work  with  the  same  degree 
of  efficiency  as  men  in  occupations  where  both 
sexes  are  employed,  have  a  right  not  merely  to  a 
woman's  Living  Wage,  but  to  the  same  remunera- 
tion as  their  male  fellow  workers.  Distributive 
justice  requires  that  equally  competent  workers  be 
rewarded  equally.  Moreover,  when  the  women 
receive  less  pay  than  the  men  the  latter  are  gradual- 
ly driven  out  of  that  occupation.  ^  Unless  we  hold 
that  an  increase  in  the  proportion  of  women  work- 
ers is  desirable,  we  must  admit  that  social  welfare 
would  be  advanced  by  the  payment  of  uniform 
wages  to  both  sexes  for  equally  efficient  labor.  ^ 

Children  of  either  sex  who  have  reached  the  age 
at  which  they  can,  without  detriment  to  themselves 
or  society,  become  wage  earners,  but  who  cannot 
perform  the  work  of  adults,  have  a  right  to  a  wage 
sufficient  to  afford  them  a  decent  livelihood.  They 
are  entitled  to  this  because  their  wages,  generally 
speaking,  constitute  their  sole  source  of  mainte- 
nance. It  must  be  noted  that  a  Living  Wage  for 
children  refers  to  their  essential  needs  as  members 
of  a  family,  not  to  the  requisites  of  boarding-house 
life,  as  this  is  not  the  condition  in  which  working 
children  are  usually  placed.  Finally,  children  of 
either  sex  who  perform  the  work  of  adults  ought 

*  Cf.  Smart,  "Studies  in  Economics,"  chapter  on  "Women's 
Wages." 

^Cf.    Fairbanks,    "Introduction   to   Sociology,"   p.    148. 

108 


A    PERSONAL    LIVING    WAGE 

to  receive  the  wages  of  adults,  for  the  same  reasons 
that  justify  the  payment  of  men's  wages  to  equally 
efficient  women.  ^ 

^  In  speaking  of  a  Living  Wage,  whether  for  men,  women, 
or  children,  it  is  assumed  that  they  are  employed  during  the 
whole  of  the  working  time  of  the  year.  Consequently,  women 
who  are  obliged  to  devote  all  their  attention  to  household 
duties  for  a  oonsiderable  portion  of  the  year,  and  children  who 
attend  school,  are  not  entitled  to  a  Living  Wage  for  the  entire 
year.  As  we  shall  see,  their  right  to  a  Living  Wage  must  be 
secured  in  another  way. 


109 


CHAPTER  VI 

The  Right  to  a  Family  Living  Wage 

The  controversy  regarding  the  attitude  of  Pope  Leo's 
Encyclical  toward  a  family  Living  Wage.  Cardinal  Zig- 
liara's  peculiar  interpretation  of  the  principle  of  equivalence. 
His  argument  from  the  family's  relation  to  the  work  done 
by  the  husband  and  father.  The  theory  that  a  wage  suf- 
ficient for  family  maintenance  is  due  merely  as  a  matter 
of  social  utility.  The  theory  that  bases  it  on  "equity."  And 
on  the  sociai  estimate.  A  family  Living  Wage  is  due  to 
the  adult  male  laborer  because  of  his  dignity  as  a  man  and 
his  essential  needs.  An  objection  answered.  The  family 
Living  Wage  is  a  uniform  quantity,  and  is  due  to  all  adult 
male  laborers.  The  size  of  family  to  be  taken  as  a  measure 
of  this  wage. 

When  Pope  Leo  XIII,  in  his  encyclical,  "On  the 
Condition  of  Labor,"  declared  that  the  remuneration 
of  the  workingman  ought  to  be  at  least  sufficient 
"to  support  him  in  reasonable  and  frugal  comfort," 
a  discussion  immediately  arose  among  Catholic 
moralists  as  to  whether  the  phrase  just  quoted  was 
intended  to  cover  the  conditions  and  requisites  of 
family  life.  Those  who  held  to  the  affirmative 
cited  in  confirmation  of  their  position  the  following 
passage,  which  occurs  in  the  next  paragraph  of  the 
encyclical:  "If  a  workman's  wages  be  sufficient  to 

no 


A    FAMILY    LIVING    WAGE 

maintain  himself,  his  wife,  and  his  children  in  rea- 
sonable comfort,  he  will  not  fir.d  it  difficult to 

put  by  a  little  property." 

Unquestionably  the  hypothetical  wages  referred 
to  are  assumed  to  constitute  the  compensation  that 
is  normal,  but  there  is  no  explicit  assertion  that  so 
much  is  due  the  laborer  as  a  matter  of  justice. 
Within  a  few  months  after  these  words  were  writ- 
ten, a  letter  was  addressed  to  the  Holy  See  by  the 
Archbishop  of  Malines,  Cardinal  Goosens,  asking 
whether  an  employer  would  do  wrong  who  paid  his 
men  a  wage  sufficient  for  personal  maintenance, 
but  inadequate  to  the  needs  of  a  family.  Pope  Leo 
did  not  himself  send  any  official  response,  but  re- 
ferred the  matter  to  Cardinal  Zigliara,  who  replied 
that  the  employer  in  question  would  not  violate 
justice,  but  that  his  action  might  sometimes  be 
contrary  to  charity,  or  to  natural  righteousness. 
At  present  all  Catholic  writers  on  the  subject  hold 
that  the  employer  is  under  moral  obligation  to  give 
the  workingman  a  wage  that  will  maintain  his 
family  as  well  as  himself,  but  they  do  not  agree  that 
this  obligation  falls  under  the  head  of  justice.  In 
other  words,  some  of  them  deny  that  the  laborer  has 
a  strict  right  to  a  family  Living  Wage.  ^ 

Cardinal  Zigliara's  explanation  of  his  decision 
leaves  something  to  be  desired,  both  in  clearness 
and  in  conclusiveness.  He  says  that  when  a  rela- 
tion of  equality  exists  between  the  labor  performed 
and   the    compensation    received   the    demands    of 

^  A    critical    review    of    this    discussion    will    be    found    in 
Vermeersch,    op    cit.,    pp.    530-554.     Cf.    also,    Turman,    "Le 
Catholicisme  sociale,"  pp.  58-68. 
Ill 


A    LIVING    WAGE 

justice  are  fully  satisfied;  and  he  plainly  intimates 
that  this  condition  is  verified  when  the  laborer  Is 
paid  merely  an  individual  Living  Wage.  According 
to  this  reasoning,  the  minimum  means  of  a  decent 
livelihood  is  likewise  the  maximum  that  any  laborer 
can  claim  as  a  matter  of  justice.  A  Living  Wage 
is  in  all  cases  a  completely  just  wage.  As  this  as- 
pect of  the  wage  problem  does  not  come  within  the 
scope  of  our  argument,  it  is  given  merely  a  passing 
mention  to  show  the  danger  of  attempting  to  base 
the  right  to  a  Living  Wage  upon  assumptions  of 
equality  between  labor  and  remuneration.  He  says 
that  in  labor-contracts  the  rule  of  equality  must  be 
interpreted  with  reference  to  the  laborer's  duty  of 
self-support.  The  remuneration  must  be  adequate, 
equal,  to  this  end ;  hence  the  relation  of  equality  has 
for  one  term  the  laborer's  wages,  and  for  the  other 
his  purely  personal  needs.  In  the  last  chapter  some- 
thing was  said  concerning  the  ambiguity  to  which 
the  principle  of  equivalence  is  liable :  the  interpreta- 
tion that  we  are  considering  looks  like  an  abandon- 
ment, or,  at  least,  an  essential  transformation  of  it ; 
for  the  equality  required  is  no  longer  between  the 
things  exchanged,  labor  and  pay,  or  between  the  net 
gains  of  the  two  contracting  parties,  but  between 
compensation  and  the  laborer's  welfare.  The  Cardi- 
nal defends  his  interpretation  on  the  ground  that 
human  labor,  being  the  product  of  a  person,  is  of 
much  greater  dignity  than  merchandise,  and  ought 
not  to  be  measured  by  precisely  the  same  standard 
of  contractual  justice.  Not  merely  the  work  itself, 
but  the  human  doer  of  it,  must  be  taken  into  account 

112 


A    FAMILY    LIVING    WAGE 

in  determining  its  just  equivalent.  Undoubtedly; 
but  why  should  it  be  assumed  that  a  just  equivalent 
is  found  in  the  bare  essentials  of  decent  living  out- 
side of  the  married  state?  Since  the  laborer  has 
many  other  needs,  the  satisfaction  of  which  is  mor- 
ally legitimate,  does  it  not  seem  just  that  his  wage 
should  be  capable  of  meeting  all,  or,  at  least,  the 
more  important  of  them?  Ought  it  not  to  be  the 
equivalent  of  a  comfortable  and  care-free  family 
life,  of  a  college  education  for  his  children,  an 
annual  pleasure  trip  for  himself  and  wife,  and,  for 
all  of  them,  ample  opportunities  of  cultivating  the 
higher  life?  The  assertion  that  the  equivalence  that 
ought  to  exist  between  pay  and  work  is  realized 
when  pay  equals  a  personal  Living  Wage,  is  reaily 
very  like  a  begging  of  the  main  question.  As  an  in- 
terpretation of  the  equality  principle,  it  is  quite  as 
arbitrary  and  quite  as  incapable  of  proof  as  the  one 
advanced  by  Father  Antoine  and  noticed  in  the  last 
chapter,  namely,  that  the  remuneration  ought  to  be 
equivalent  to  the  labor-force  expended. 

Cardinal  Zigliara  says  further  that,  since  the 
product  for  which  the  laborer  is  paid  is  not  partici- 
pated in  nor  increased  by  his  family,  justice  does  not 
require  that  his  remuneration  should  be  increased 
on  their  account.  But  those  who  defend  the  labor- 
er's right  to  a  family  Living  Wage  do  not  deduce 
it  from  any  relation,  real  or  assumed,  between  his 
family  and  the  work  that  he  performs  or  the  employ- 
er that  he  serves.  They  derive  it  from  his  own 
dignity  as  a  man.  It  is  a  personal  prerogative 
which  has,  however,  his  family  as  a  secondary  bene- 

8  113 


A    LIVING    WAGE 

ficiary.  The  Cardinal  admits  and  maintains  that 
the  laborer  has  a  right  to  a  wage  sufficient  for  his 
support  outside  of  the  marriage  relation.  Now  this 
means  that  the  laborer  will  give  a  part  of  his  earn- 
ings to  some  merchant  in  exchange  for  the  clothes 
that  he  wears,  making  the  merchant  to  that  extent 
a  secondary  beneficiary  of  his  wages ;  yet  Cardinal 
Zigliara  would  not  have  argued  that,  since  the 
clothier  has  nothing  to  do  with  the  work  performed 
by  the  laborer,  the  latter  has  no  right  to  the  portion 
of  his  remuneration  thus  expended.  Neither  does  it 
follow  that  he  has  not  a  right  to  the  measure  of 
wages  necessary  to  provide  for  his  family.  The 
two  cases  differ,  indeed,  in  degree,  but  they  are 
alike  in  principle.  In  both  the  primary  purpose  of 
the  right  asserted  is  the  welfare  of  the  laborer  him- 
self, while  the  secondary  end  is  in  the  former  case 
the  clothing  merchant,  and  in  the  latter  the  laborer's 
family.  As  a  matter  of  fact,  the  argument  that  we 
are  criticizing  looks  like  a  different  interpretation 
of  the  equivalence  principle  than  the  one  discussed 
in  the  preceding  paragraph.  It  points  logically  to 
the  conclusion  that  the  laborer  has  a  strict  right 
merely  to  the  amount  of  compensation  that  will  keep 
in  repair  those  physical  forces  that  are  essential  to 
the  performance  of  his  task.  According  to  this 
interpretation,  the  relation  of  equivalence  is  not  be- 
tween wage  and  reasonable  personal  needs  outside 
of  the  married  state,  but  between  wage  and  expended 
labor- force ;  and  the  laborer  has  a  right,  not  to  com- 
pensation that  will  support  him  in  "reasonable  and 
frugal  comfort,"  but  to  that  which  will  provide  him 
114 


A    FAMILY    LIVING    WAGF 

with  the  bare  necessaries  of  life  and  working  effi- 
ciency. 

Father  Antoine  deduces  the  laborer's  claim  to  a 
family  Living  Wage  from  considerations  of  social 
welfare.  ^  In  any  rightly  ordered  society  the  father 
is  the  natural  provider  for  all  the  members  of  the 
family;  if  he  lacks  the  means  of  performing  this 
duty  adequately  the  result  is  pauperism,  crime  and 
other  social  evils.  Hence  the  laborer  who  is  the 
head  of  a  family  ought  to  receive  compensation 
sufficient  for  the  becoming  maintenance  of  his  wife 
and  children.  This  much  is  due  him  from  his  em- 
ployer, not  by  any  relation  of  strict  justice — for 
under  this  head  the  laborer  can  claim  merely  the 
means  of  repairing  expended  energy — but  as  a  mat- 
ter of  "natural  righteousness"  or  decency  {'lion- 
nefete  naturelle").  Because  of  his  relation  to  so- 
ciety on  the  one  hand,  and  to  his  employees  on  the 
other,  the  employer  is  morally  bound  to  discharge 
this  task.  Concerning  this  argument  it  will  be 
sufficient  to  say  that  the  positive  part  of  it  is  entirely 
sound ;  for  social  welfare  does  require  that  the  mar- 
ried laborer  should  command  the  means  of  properly 
providing  for  his  family,  and  that  the  employer 
should  furnish  these  means ;  while  the  assertion  that 
this  minimum  of  remuneration  is  not  due  the  labor- 
er by  a  title  of  strict  justice,  is  based  on  the  assump- 
tion, already  criticized,  that  the  equivalence  between 
work  and  pay  demanded  by  justice  is  fully  satisfied 
by  a  wage  that  replaces  the  output  of  labor-force. 

According  to  Father  Castelein,  the  value  of  a 

*  Op.  cit.,  p.  606. 

lis 


A    LIVING    WAGE 

man's  labor  is  always  equivalent  to  an  individual  Liv- 
ing Wage,  but  not  necessarily  to  a  remuneration 
that  will  provide  for  the  needs  of  a  family.  After 
the  laborer  has  been  paid  a  wage  sufficient  for  per- 
sonal maintenance,  and  after  the  other  factors  of 
production  have  been  fairly  remunerated,  there  will 
normally  remain  a  certain  gross  profit  which  in 
"general  justice,"  or  "equity,"  ought  to  be  divided 
between  employer  and  employee.  If  this  distribu- 
tion is  fairly  carried  out  the  laborer  will,  generally 
speaking,  receive  sufficient  for  his  family's  support. 
Like  Father  Antoine's,  this  view  is  correct  on  its 
positive  side,  but  its  denial  of  the  laborer's  right  to 
anything  more  than  the  means  of  personal  mainte- 
nance is  but  feebly  defended  by  its  champion.  When 
Father  Castelein  turns  from  his  perplexing  and  in- 
effective discussion  of  the  kind  of  justice  that  is 
involved,  he  admits  that  a  family  Living  Wage  is 
due  the  laborer  because  of  his  dignity  as  a  man.  ^ 

Father  Vermeersch  asserts  that  the  social  esti- 
mate, which  is  always  the  proximate  determinant  of 
the  just  price  of  labor,  regards  the  labor  of  the  head 
of  the  family  as  worth  at  least  a  family  Living 
Wage.  He  does  not,  however,  content  himself 
with  this  argument.  If  the  laborer,  he  says,  fails  to 
secure  this  amount  his  personal  independence,  or 
personal  dignity,  is  ignored;  the  exercise  of  some 
of  his  most  essential  powers  and  faculties  is  hin- 
dered ;  his  fundamental  right  to  the  use  of  the 
world's   goods   is   violated.  ^     The   validity   of  the 

^  Op.  cit.,  pp.  376-395- 
*  Op.  cit.,  thesis  29. 

116 


A    FAMILY    LIVING    WAGE 

argument  from  the  social  estimate  has  been  suffi- 
ciently criticized  in  the  last  chapter.  The  argument 
from  the  personal  dignity  of  the  laborer,  however, 
is  sound, — is,  in  fact,  the  only  one  that  rests  securely 
on  the  fundamental  principles  of  natural  justice.  ^ 

For  the  laborer  who  complies  in  a  reasonable 
degree  with  nature's  universal  law  of  work,  has  a 
natural  right  to  at  least  the  minimum  of  the  material 
conditions  of  decent  and  reasonable  living.  This 
proposition  has  received  ample  development  and  de- 
fense in  foregoing  chapters.  Now  a  decent  and 
reasonable  life  implies  the  power  to  exercise  one's 
primary  faculties,  supply  one's  essential  needs,  and 
develop  one's  personality.  Self-preservation  is  un- 
doubtedly the  "first  law  of  nature,"  but,  if  the  ex- 
perience of  the  race  is  any  criterion,  self-propaga- 
tion is  the  second.  At  least,  it  is  the  expression  of 
one  of  man's  primary  and  strongest  instincts.  One 
of  his  most  essential  needs  is  the  permanent  love  and 
companionship  of  a  person  of  the  opposite  sex.  The 
marriage  state  is  not  so  imperatively  necessary  for 
right  living  as  is  security  of  life  and  a  decent 
personal  livelihood,  yet  it  is  of  primary  importance. 
The  difference  between  these  three  needs  is  merely 
one  of  degree.  All  must  be  satisfied  in  the  average 
man  before  he  can  live  a  reasonable  and  normal  life. 
Without  a  religious  vocation,  the  majority  of  men 
cannot  reach  a  proper  degree  of  self -development 
outside  of  the  conjugal  state.  This  is  not  to  say  that 
the  man  who  has   not  been  supernaturally  called 

^  Among  the  ablest  presentations  of  this  view  are  those  of 
Pottier  and  Verhaegen  in  the  works  already  cited. 

117 


A    LIVING    WAGE 

cannot  be  celibate  and  chaste — a  doctrine  becoming" 
only  to  the  foul  of  mind  and  weak  of  will — ^but  it 
means  that  for  the  average  man  celibacy  is  not  nor- 
mal, and  consequently  cannot  be  taken  as  a  measure 
of  reasonable  and  natural  rights.  The  man  who  is 
forced  by  poverty  to  accept  it  supports  an  unnatural 
and  unjustifiable  burden,  and  is  deprived  of  one  of 
the  chief  means  of  normal  self-development.  Hence, 
"the  minimum  of  the  material  conditions  of  decent 
and  reasonable  living"  comprises,  for  the  adult  male, 
the  means  of  supporting  a  family.  To  this  much  of 
the  world's  goods  he  has  a  natural  right  which  is 
valid  "against  the  members  of  the  industrial  com- 
munity in  which  he  lives,"  In  the  case  of  the  labor- 
er this  claim  must  be  formulated  in  terms  of  wages. 
To  resume :  the  laborer  has  a  right  to  a  family  Liv- 
ing Wage  because  this  is  the  only  way  in  which  be 
can  exercise  his  right  to  the  means  of  maintaining  a 
family,  and  he  has  a  right  to  these  means  because 
they  are  an  essential  condition  of  normal  life. 

It  has  been  objected  that  according  to  this  reason- 
ing, the  laborer  would  be  entitled  to  a  wage  sufficient 
to  support  his  infirm  and  needy  parents.  To  care 
for  them  is  both  his  duty  and  his  right ;  consequent- 
ly he  has  a  right  to  the  one  means  adequate  to  this 
end,  an  increased  remuneration  for  his  labor.  The 
cases,  however,  are  not  in  all  respects  parallel.  The 
right  to  become  the  head  of  a  family  is  essentially 
different  from  the  right  to  support  infirm  parents. 
The  former  is  a  necessary  condition  of  normal  and 
reasonable  self-development,  and  implies  the  right 
to  the  material  goods  required  for  its  realization. 

ii8 


A    FAMILY    LIVING     WAGE 

The  right  to  the  means  of  maintaining  a  family, 
therefore,  is  not  finally  derived  from  the  duty  of 
maintaining  it — from  the  needs  of  the  family — but 
from  the  laborer's  dignity,  from  his  ozuii  essential 
needs.  True  it  is  that  if  the  support  of  wife  and 
children  did  not  in  the  normal  order  of  things  fall 
upon  the  husband  and  father,  he  would  not  have  a 
right  to  the  additional  remuneration  required  for 
this  purpose;  but  this  merely  shows  that  the  duty 
is  the  occasion,  or  condition,  not  the  ultimate  cause 
of  the  right.  The  right  to  the  conditions  of  being 
the  head  of  a  family,  which  is  obvious,  implies  the 
right  to  a  family  Living  Wage,  because  nature  and 
reason  have  decreed  that  the  family  should  be  sup- 
ported by  its  head.  But  the  right  to  support  one's 
needy  parents  rests  upon  an  entirely  different  basis. 
Its  existence  is  not  an  essential  condition  of  right 
and  reasonable  life  ;  for  in  the  normal  order  of  things 
the  parents  themselves  will  have,  or  should  have, 
taken  precautions  against  such  an  emergency.  And, 
as  rights  are  not  to  be  interpreted  by  the  abnormal 
and  exceptional  exigencies  of  existence,  the  laborer 
cannot  justly  claim  an  increased  wage  on  account 
of  them. 

It  is  held  by  some  that  the  laborer's  remuneration 
should  vary  with  the  size  of  his  family,  but  this  seems 
an  undesirable  way  of  measuring  it.  There  are 
many  reasons  why  the  cost  of  rearing  the  family 
should  be  regarded  as  a  unit,  and  the  laborer's  wa- 
ges as  a  uniform  rate.  Then  the  cost  of  maintain- 
ing himself  and  wife  until  death  and  the  children 
until   they   are   of   an    age   to   be  self-supporting, 

119 


A    LIVING    WAGE 

divided  by  his  working  time  as  an  adult  in  full  vigor, 
will  give  in  terms  of  money  the  family  Living  Wage. 
Hence  the  laborer  who  is  not  yet  married  has  a  right 
to  this  family  wage,  and  not  merely  to  a  remunera- 
tion that  will  suffice  for  his  present  needs.  The 
difference  should  be  reckoned  as  a  necessary  provi- 
sion for  marriage,  and,  therefore,  as  slightly  dimin- 
ishing the  rate  of  pay  that  otherwise  would  be 
necessary  as  soon  as  the  laborer  entered  the  con- 
jugal state. 

Moreover,  the  right  to  a  family  Living  Wage  be- 
longs to  every  adult  male  laborer,  whether  he  in- 
tends to  marry  or  not;  for  rights  are  to  be  inter- 
preted according  to  the  average  conditions  of  hu- 
man life,  and  these  suppose  the  laborer  to  become 
the  head  of  a  family.  There  is,  too,  a  good  social 
reason  for  treating  married  and  unmarried  alike  in 
the  matter  of  remuneration.  If  employers  were 
morally  free  to  pay  single  laborers  less  than  a  fam- 
ily Living  Wage  they  would  strive  to  engage  these 
exclusively,  and  perhaps  to  exact  a  promise  that 
they  should  not  marry.  Thus  a  premium  would  be 
placed  upon  a  very  undesirable  kind  of  celibacy. 

The  family  that  it  seems  reasonable  to  take  as  a 
basis  for  estimating  the  proper  remuneration  of  the 
husband  and  father,  is  that  containing  the  average 
number  of  children  found  in  workingmen's  families. 
This  standard  is  not  entirely  satisfactory,  since  it 
not  infrequently  happens  that  the  mathematical 
average  is  exceeded  in  a  large  number  (a  majority 
sometimes)  of  the  families  of  a  place,  but  it  seems 
to  be  the  best  that  is  available.    We  cannot  take 

120 


A    FAMILY    LIVING    WAGE 

"the  number  of  children  that  is  usual,"  as  suggested 
by  Father  Vermeersch,  ^  for  the  expression  has  no 
precise  meaning;  no  such  number  exists.  In  five 
different  groups  of  full-grown  families  (1636  in  all) 
described  in  the  Sixth  and  Seventh  Annual  Reports 
of  the  United  States  Commissioner  of  Labor,  the 
following  facts  are  to  be  observed :  the  number  of 
children  per  family  in  a  bare  majority  of  the  fam- 
ilies of  three  of  the  groups,  was  represented  by  three 
different  figures ;  in  the  other  two  groups  the  "usual 
number"  was  four  different  numbers.  The  prob- 
lem will  be  made  somewhat  more  definite  by  an  ex- 
ample :  in  one  group,  consisting  of  832  families,  the 
numbers  most  frequently  recurring  were  three,  four, 
and  five ;  that  is  to  say,  there  were  149,  128,  and  121 
families  containing  respectively  three,  four,  and 
five  children.  Now  it  could  scarcely  be  said  that 
the  "usual  number"  of  children  per  family  in  that 
group  was  from  three  to  five,  for  all  these  families 
combined  were  less  than  a  majority.  The  average 
number,  therefore,  seems  to  be  the  only  service- 
able criterion.  Or,  if  that  seems  too  low,  since 
a  majority  of  the  families  considered  might  be 
larger  than  the  average  indicates,  the  highest  num- 
ber that  is  found  in  a  considerable  proportion  of 
the  families,  might  be  adopted  as  the  standard.  In 
the  group  just  referred  to,  the  average  number 
of  children  per  family  was  4.3,  while  the  number 
in  one-third  of  the  families  (347)  was  five  or 
more.  The  estimates  of  a  family  Living  Wage 
made  on  the  basis  of  these  two  numbers  would  not 

*0p.  cit.,  pp.  577,  578. 

121 


A    LIVING    WAGE 

be  far  apart.  Hence  it  is  sufficiently  accurate  to 
say  that  the  family  that  ought  to  serve  as  a  standard 
of  measurement  in  the  matter  of  decent  remunera- 
tion for  the  adult  male  laborer,  is  one  having  four 
or  five  children. 

Note  to  Second  Edition. — Certain  reviewers 
have  contended  that,  as  the  immediate  object  of  the 
labor-contract  is  the  work  done,  this,  and  not  a 
family  livelihood,  is  the  term  to  which  strict  justice 
requires  the  wage  to  be  equivalent.  Now,  the 
"work  done"  is  either  to  be  taken  objectively — 
divorced  entirely  from  the  needs  and  sacrifices  of 
the  doer,— or  it  is  not  to  be  so  taken.  In  the  for- 
mer hypothesis,  the  market  rate  of  wages  must  al- 
ways be  regarded  as  just;  in  the  latter,  the  "family 
needs"  of  the  laborer  have  as  vahd  claims  to  be 
considered  as  have  those  individual  needs  which  are 
not  met  by  the  market  rate,  yet  which  must  be  met 
if  he  is  to  live  decently.  But  the  author  prefers  to 
discard  the  "equivalence"  concept  entirely,  and  to 
regard  the  difference  between  the  current  rate  and 
a  family  Living  Wage,  as  due  the  laborer  in  virtue 
of  his  own  personal  dignity  and  the  distributive 
function  of  the  employer.  Because  of  this  function, 
his  generic  obligation  so  to  use  the  resources  of  the 
earth  that  his  neighbors  will  be  able  to  obtain  on 
reasonable  conditions  a  decent  livelihood  therefrom, 
becomes  a  specific  obhgation  to  pay  his  employees 
a  family  Living  Wage.  In  a  sense  this  obligation 
seems  to  belong  to  distributive  justice ;  nevertheless 
it  is  one  of  strict  justice,  precisely  as  is  the  obliga- 
tion of  not  imposing  upon  any  individual  a  dispro- 
portionate amount  of  taxes. 

122 


CHAPTER  VII 


A  Concrete  Estimate  of  a  Living  Wage 

A  more  precise  determination  of  a  "decent  livelihood" 
necessary.  It  can  be  made  with  sufficient  exactness  for  prac- 
tical needs.  A  decent  livelihood  may  be  taken  either  ab- 
solutely or  relatively  to  the  conventional  needs  of  a  class. 
Estimates  by  various  authorities  of  a  decent  livelihood  in 
terms  of  goods.  The  slight  discrepancies  due  to  different 
viev^^points.  Detailed  statement  of  the  elements  of  decent 
living  for  every  section  of  the  family.  Professor  Small's 
estimate  of  the  minimum  money  wagt  is  too  high.  John 
Mitchell's  estimate.  The  cost  of  living  in  the  home  of  an 
exceptionally  economical  housewife.  The  cost  of  living 
as  deduced  from  the  expenditures  in  families  in  the  cotton 
industry.  A  "revised"  estimate  of  $601.03.  This  estimate 
confirmed  by  an  analysis  of  the  condition  of  families  in  two 
other  industries.  With  a  conservative  allowance  for  lost 
time,  $600  per  year  is  equivalent  to  $2.10  per  day.  Con- 
clusion that  anything  less  than  $600  per  year  is  not  a  Living 
Wage  in  any  city  in  America,  and  that  this  amount  is  not 
sufficient  in  the  largest  cities. 

According  to  the  argument  of  the  last  chapter,  a 
decent  livelihood  for  the  adult  male  laborer  means  a 
wage  capable  of  maintaining  himself,  his  wife,  and 
those  of  his  children  who  are  too  young  to  be  self- 
supporting,  in  a  condition  of  reasonable  comfort. 
(Henceforth  when  the  phrase,  "a  decent  livelihood," 
123 


A    LIVING    WAGE 

and  "a  Living  Wage,"  are  used  without  qualification 
they  are  to  be  understood  in  this  sense.)  The  ques- 
tion naturally  arises,  what  precisely  does  this  imply 
in  terms  of  goods  or  money?  Unless  an  attempt  is 
made  to  answer  it,  the  whole  discussion  of  wage- 
rights  and  obligations  remains  too  abstract,  too 
vague,  to  be  of  much  practical  value.  There  would, 
in  fact,  be  some  force  to  the  objection  that  all  the 
workingmen  of  America  are  even  now  paid  a  Living 
Wage. 

Evidently  the  question  before  us  cannot  be  an- 
swered with  absolute  precision.  The  needs  of  men 
and  their  powers  of  making  an  effective  use  of  a  giv- 
en amount  of  goods  or  money,  are  too  dissimilar  to 
find  a  perfectly  exact  expression  in  any  common  de- 
nominator. And  even  if  a  common  rate  of  wages 
would  bring  precisely  the  same  degree  of  comfort  to 
all  the  families  depending  upon  it,  there  remains  the 
supreme  difficulty  of  translating  "reasonable  com- 
fort" into  more  concrete  terms.  In  all  probability 
the  individual  estimates  of  no  body  of  men,  however 
competent  and  well-meaning,  would  be  in  entire 
agreement.  And  no  prudent  person  would  assert 
that  a  slight  deduction  from  the  amount  that  he  re- 
garded as  certainly  sufficient  for  a  decent  livelihood 
would  render  the  remainder  certainly  insufficient. 
Nevertheless,  the  question  can  be  answered  with  suf- 
ficient definiteness  to  safeguard  the  human  dignity 
of  the  laborer  and  his  family,  and  that  is  all  that  any 
one  cares  to  know.  We  can  distinguish  twilight  from 
darkness,  although  we  cannot  identify  the  precise 
moment  when  the  one  merges  into  the  other.  Though 

124 


ESTIMATE    OF    A    LIVING    WAGE 

we  cannot  say  just  when  artificial  light  becomes  more 
effective  than  that  of  the  waning  day,  we  usually  call 
it  into  service  before  the  approaching  darkness 
proves  notably  inconvenient.  Thus  it  is  in  the 
matter  of  a  Living  Wage.  Some  rates  of  remunera- 
tion we  know  to  be  certainly  adequate,  and  others  to 
be  no  less  certainly  inadequate.  While  we  may  not 
be  able  to  put  our  finger  on  the  precise  point  of  the 
descending  scale  at  which  the  rate  ceases  to  be  suffi- 
cient, we  can  approximate  it  in  such  a  way  that  the 
resulting  inaccuracy  will  not  produce  notable  incon- 
venience. We  can,  at  least,  define  a  limit  below 
which  it  is  wrong  to  go,  while  not  committing  our- 
selves to  the  conclusion  that  the  limit  is  sufficiently 
high.  In  other  words,  a  wage  under  the  limit  would 
be  regarded  as  certainly  too  low,  but  a  wage  at  the 
limit,  as  doubtful.  An  estimate  of  this  character  can 
be  so  formulated  as  to  have  a  very  high  practical 
value. 

A  decent  livelihood  may  be  understood  either  abso- 
lutely or  relatively.  In  the  former  sense  it  is  an 
unvarying  standard  that  is  applicable  to  all  conditions 
of  human  existence.  It  takes  no  account  of  needs 
based  on  custom  or  on  any  subjective  appreciation  of 
the  requisites  of  welfare,  nor  does  it  make  any  al- 
lowance for  the  possibilities  of  progress.  It  is 
measured  solely  by  man's  essential  and  universal 
needs,  and  describes  in  general  terms  the  requisites 
of  normal  and  reasonable  human  life.  And  it  may 
obviously  be  either  below  or  above  what  is  known  as 
the  conventional  standard  of  a  community.  For  ex- 
ample, the  men  and  women  of  America  could  live 

125 


A    LIVING    WAGE 

decent  and  becoming  lives,  absolutely  speaking,  with- 
out wearing  shoes  during  the  summer  season.  On 
the  other  hand,  a  conventional  standard  of  living, 
though  satisfactory  to  the  people  with  whom  it  ob- 
tains, may  fall  short  of  the  absolute  norm.  If  the 
description  given  in  Dicey 's  "Peasant  State"  is  cor- 
rect a  large  class  of  the  inhabitants  of  Bulgaria,  ap- 
parently contented,  do  not  live  reasonable  human 
lives.  *  They  have  not  the  means  of  exercising  that 
minimum  of  activity,  physical,  intellectual,  and 
moral,  which  should  differentiate  the  life  of  men 
from  that  of  beasts. 

While  the  conditions  of  existence  indicated  by  the 
absolute  standard  constitute  a  minimum  below  which 
it  is  wrong  for  men  to  descend,  they  are  not  sufficient 
for  decent  living  in  the  case  of  most  civilized  com- 
munities. Man  is  everywhere  affected  by  two  classes 
of  needs :  objective,  or  natural ;  and  subjective,  or  ac- 
quired. 

Through  the  influence  of  habit  or  custom  he  comes 
to  regard  certain  of  these  acquired  needs  as  essential 
elements  of  a  decent  standard  of  life.  They  differ 
relatively  to  different  races,  communities,  ranks  and 
classes  of  men,  but  to  the  persons  among  whom  they 
have  been  developed  they  are  of  vital  importance. 
Hence  a  decent  livelihood,  or  a  Living  Wage,  must 
conform  in  a  reasonable  degree  to  the  conventional 
standard  of  life  that  prevails  in  any  community  or 
group.  For,  in  order  to  live  becomingly,  men  must 
possess  not  only  those  goods  that  are  objectively 
necessary,  but  in  some  measure  those  that  they  think 

*  Quoted  in  Mrs.  Bwanquet's  "Standard  of  Life,"  p.  9. 
126 


ESTIMATE    OF    A    LIVING    WAGE 

are  necessary.  Indeed,  the  latter  may  become  more 
indispensable  to  decent  living  than  some  of  the  things 
that  are  objective  and  primary;  for  men  will  some- 
times procure  them  at  the  expense  of  the  others. 
Thus,  many  persons,  men  as  well  as  women,  will  de- 
prive themselves  of  necessary  food  rather  than  appear 
among  their  neighbors  in  garments  that  are  not  in 
accordance  with  the  conventional  modes.  At  any 
rate,  the  inability  to  satisfy  the  more  important  of  the 
conventional  needs  always  involves  a  grave  injury  to 
self-respect,  and  therefore  subjects  human  beings  to 
hardships  that  are  incompatible  with  normal  and  rea- 
sonable living.  Finally,  owing  to  the  development 
of  new  wants,  a  decent  livelihood  now  may  be  below 
the  standard  of  decency  that  will  prevail  ten  years 
hence.  To  ignore  the  newly  developed  wants  then 
would  be  as  harmful  as  to  ignore  existing  wants  now  ; 
hence  a  Living  Wage  is  relative  not  only  to  the  com- 
munity or  class,  but  to  its  different  stages  of  develop- 
ment. 

The  content  of  a  Living  Wage  for  the  laborers  of 
America  will  be  described  first  as  a  certain  quantity 
of  goods  and  conditions  of  living,  and  then  in  terms 
of  money.  The  following  estimates  will  prove  sug- 
gestive and  helpful : 

"Undoubtedly  the  first  moral  charge  on  the  na- 
tional income  is  such  a  sum  as  is  necessary  to  bring 
up  a  family,  providing  for  health,  education,  effi- 
ciency of  work,  and  the  conditions  generally  of  a 
moral  life.  Anything  below  such  a  level  subjects 
human  beings  to  hardships  and  temptations  to  which 
they  should  not  be  exposed,  and  to  conditions  in 

127 


A    LIVING    WAGE 

which  men  and  women  are  not  free  but  in  bondag^e 
to  physical  wants.  If  the  present  system,  or  any 
system,  did  not  promise  this  at  some  not  distant 
period,  we  should  have  to  say,  like  Mill,  that,  if 
this  or  communism  were  the  alternative,  'all  the 
difficulties,  great  or  small,  of  Communism  would 
be  but  as  dust  in  the  balance.'  "  * 

"The  necessaries  for  the  efficiency  of  an  ordinary 
agricultural  or  of  an  unskilled  town  laborer  and  his 
family,  in  England,  in  this  generation,  may  be  said- 
to  consist  of  a  well  drained  dwelling  with  several 
rooms,  warm  clothing,  with  some  changes  of  under- 
clothing, pure  water,  a  plentiful  supply  of  cereal 
food,  with  a  moderate  allowance  of  meat  and  milk, 
and  a  little  tea,  etc.,  some  education  and  some 
recreation,  and  lastly,  sufficient  freedom  for  his 
wife  from  other  work  to  enable  her  to  perform 
properly  her  maternal  and  her  household  duties. . .  . 
...  .In  addition,  perhaps,  some  consumption  of  al- 
cohol and  tobacco,  and  some  indulgence  in  fashion- 
able dress  are  in  many  places  so  habitual  that  they 
may  be  said  to  be  conventionally  necessary,  since 
in  order  to  obtain  them  the  average  man  and  woman 
will  sacrifice  some  things  that  are  necessary  for 
efficiency."  ^ 

Professor  Munro  defines  a  Living  Wage  as,  "a 
yearly  wage  sufficient  to  maintain  the  worker  in  the 
highest  state  of  industrial  efficiency,  and  to  afford 
him  adequate  leisure  to  discharge  the  duties  of 
citizenship."  ^ 

^  Smart,  "Studies  in  Economics,"  p.  302,  note. 
-  Marshall,  "Principles  of  Economics,"  Bk.  II,  ch.  IV,  sec.  3, 
*  "Economic  Journal,"  June,  1894,  P-  365- 
128 


ESTIMATE    OF    A    LIVING    WAGE 

Mr.  Devas  summarizes  the  minimum  livelihood 
that  should  be  guaranteed  to  all  workers  thus :  the 
means  of  physical  existence ;  practical  possibility  of 
marriage ;  separate  homes ;  insurance  against  sick- 
ness, old  age,  and  industrial  accidents ;  and  some 
access  to  the  treasures  of  literature,  art  and  cul- 
ture. ^ 

"There  is  a  growing  feeling,  not  confined  to 
Trade  Unionists,"  say  Sidney  and  Beatrice  Webb, 
"that  the  best  interests  of  the  community  can  only 
be  attained  by  deliberately  securing  to  each  section 
of  the  workers  those  conditions  which  are  neces- 
sary for  the  continuous  and  efficient  fulfilment  of 
its  functions  in  the  social  organism."  ^ 

The  Conference  on  the  Christian  Organization  of 
Industry  held  at  Holborn  Hall,  London,  Nov,  29, 
1893,  interpreted  a  Living  Wage  as  a  remuneration 
that  would  "enable  workers  to  maintain  healthy  and 
human  homes." 

Professor  Patten  holds  that  the  workingman  has 
a  right  to  a  home ;  to  become  the  head  of  a  family ; 
to  self-development ;  to  a  share  in  the  social  sur- 
plus sufficiently  large  to  make  him  comfortable ; 
to  the  leisure  that  is  necessary  for  the  revival  of 
physical  and  mental  powers ;  to  recreation  for  the 
sake  of  symmetrical  development ;  to  cleanliness  in 
and  about  the  home ;  and  to  some  development  of 
his  sense  of  the  beautiful.  ^ 

According  to  President  Gompers  of  the  American 
Federation  of  Labor,  a  Living  Wage  is,  "a  wage 

^  "Political  Economy,"  p.  498,  2d  edition. 

*  "Industrial   Democracy,"  p.   590,   ist  edition. 

*  "The  Theory  of  Prosperity,"  pp.  218-227. 

9  129 


A    LIVING    WAGE 

which,  when  expended  in  the  most  economical 
manner,  shall  be  sufficient  to  maintain  an  average 
sized  family  in  a  manner  consistent  with  whatever 
the  contemporary  local  civilization  recognizes  as 
indispensable  to  physical  and  mental  health,  or,  as 
required  by  the  rational  self-respect  of  human 
beings."  ^ 

"In  cities  of  from  five  thousand  to  one  hundred 
thousand  inhabitants,"  says  President  Mitchell  of 
the  United  Mine  Workers,  "the  American  standard 
of  living  should  mean,  to  the  ordinary  unskilled 
workman  with  an  average  family,  a  comfortable 
house  of  at  least  six  rooms.  It  should  mean  a  bath- 
room, good  sanitary  plumbing,  a  parlor,  dining- 
room,  kitchen,  and  sufficient  sleeping-room  that 
decency  may  be  preserved  and  a  reasonable  degree 
of  comfort  maintained.  The  American  standard 
of  living  should  mean,  to  the  unskilled  workman, 
carpets,  pictures,  books,  and  furniture  with  which 
to  make  his  home  bright,  comfortable,  and  attract- 
ive for  himself  and  his  family,  an  ample  supply  of 
clothing  suitable  for  winter  and  summer,  and  above 
all  a  sufficient  quantity  of  good,  wholesome,  nourish- 
ing food  at  all  times  of  the  year.  The  American 
standard  of  living,  moreover,  should  mean  to  the 
unskilled  workman,  that  his  children  be  kept  in 
school  until  they  have  attained  the  age  of  sixteen  at 
least,  and  that  he  be  enabled  to  lay  by  sufficient  to 
maintain  himself  and  his  family  in  times  of  illness, 
or  at  the  close  of  his  industrial  life,  when  age  and 
weakness  render  further  work  impossible,  and  to 

^  "The  American  Federationist,"  April,  1898. 
130 


ESTIMATE    OF    A    LIVING    WAGE 

make  provision  for  his  family  against  premature 
death  from  accident  or  otherwise. 

"This,  or  something  like  this,  is  the  American 
standard  of  living,  as  it  exists  in  the  ideals  of  the 

unskilled  workingmen For  the  great  majority 

of  men,  who  are  willing  to  work  and  are  not  in- 
capacitated by  physical,  mental,  or  moral  defects, 
the  manner  of  living  above  described  is  an  approxi- 
mate statement  of  what  their  standard  should  be; 
and  with  the  great  productivity  of  American  labor, 
I  believe  it  not  unreasonable  to  say  that  these  things 
should  now  be  possessed  by  every  workingman, 
however  unskilled,"  ^ 

Father  Vermeersch's  estimate  of  the  content  of 
a  Living  Wage  is  as  follows :  moderate  food,  cloth- 
ing and  shelter  for  the  laborer  and  his  family; 
festival  days  and  some  recreation;  proper  educa- 
tion for  the  laborer's  children;  and  suitable  provi- 
sion against  accidents,  disease  and  old  age.  ^ 

All  of  these  estimates,  however  various  the  terms 
in  which  they  are  formulated,  are  in  tolerably  close 
agreement,  except  in  the  matter  of  provision  for 
sickness,  disability  and  old  age.  The  cause  of  this 
discrepancy  lies  in  the  different  viewpoints  from 
which  the  problem  is  regarded.  Writers  who  have 
in  mind  the  requisites  of  social  welfare,  as  Marshall 
and  Munro,  consider  the  Living  Wage  primarily 
in  relation  to  the  laborer's  industrial  efficiency. 
They  do  not  take  account  of  his  needs  during  the 
time  when  he  is  unable  to  work  because  they  are 

*  "Organized  Labor,"  pp.  ii6,  117. 
'  "Quaestiones  de  Justitia,"  p.  576, 

131 


A    LIVING    WAGE 

not  describing  what  he  ought  to  have  as  a  man,  but 
what  he  requires  as  an  instrument  of  production. 
This  is,  of  course,  an  entirely  proper  subject  of  in- 
quiry, just  as  is  the  cost  of  keeping  a  machine  in 
repair  or  a  horse  in  a  condition  of  health  and 
strength,  but  it  has  no  necessary  relation  to  that 
measure  of  the  requisites  of  living  which  is  due  to 
the  laborer  as  a  man  and  an  end  in  himself.  The 
question  that  we  are  concerned  with  is  not  what  a 
man  must  have  in  order  to  be  a  profitable  producer, 
but  what  he  ought  to  have  as  a  human  being.  The 
estimates  referred  to,  however,  are  instructive,  in- 
asmuch as  they  indicate  that  in  the  long  run  social 
utility  and  the  demands  of  individual  justice  are  in 
substantial  accord. 

The  following  is  submitted  as  a  rough  estimate  of 
the  minimum  amount  of  goods  and  opportunities 
that  will  suffice  for  decent  living  and  the  rearing  of 
a  family: 

I.  Food,  clothing  and  shelter  for  the  laborer  and 
his  family  until  his  children  are  old  enough  to  be- 
come wage  earners. 

(a)  The  Children.  It  was  stated  in  the  last 
chapter  that  the  average  number  of  children  found 
in  the  workingmen's  families  of  full  growth,  is  the 
only  practicable  standard  for  estimating  the  extent 
of  the  family's  needs  under  this  head.  A  study  of 
the  families  for  which  statistics  are  presented  in  the 
"Cotton  Group"  of  the  Seventh  Annual  Report  of 
the  Department  of  Labor  leads  to  the  conclusion 
that  the  average  number  of  children  in  the  families 
there  described  in  which  the  mother  had  reached 
132 


ESTIMATE    OF     A    LIVING    WAGE 

the  end  of  the  child-bearing  period,  was  4.4.  The 
number  of  famiHes  enumerated  was  2,132;  they 
were  distributed  over  seventeen  states,  North,  South, 
East,  and  West,  and  represented  fifteen  nationaHties. 

Except  possibly  during  school  vacation,  no  child 
of  either  sex  should  be  employed  as  a  wage  earner 
under  the  age  of  sixteen  years.  Below  that  age  they 
are,  as  a  rule,  not  sufficiently  strong  to  work  day 
after  day  under  the  direction  of  an  employer.  Be- 
sides, if  they  are  taken  out  of  school  earlier  they  get 
less  than  a  fair  share  of  education,  and  of  the  indus- 
trial opportunities  depending  upon  it.  ^ 

(b)  The  Wife.  The  welfare  of  the  whole  fam- 
ily, and  that  of  society  likewise,  renders  it  impera- 
tive that  the  wife  and  mother  should  not  engage  in 
any  labor  except  that  of  the  household.  When  she 
works  for  hire  she  can  neither  care  properly  for  her 
own  health,  rear  her  children  aright,  nor  make  her 
home  what  it  should  be  for  her  husband,  her  chil- 
dren and  herself.  In  the  words  of  the  Second 
Congress  of  Christian  workingmen  at  Rheims,  "la 
femme  devenue  ouvriere  n'  est  plus  une  femme."^ 
Among  the  associations  and  individuals  that  have 
protested  against  the  employment  of  wives  and 
mothers,  or  at  least  of  mothers,  may  be  mentioned : 
the  Union  of  Catholic  Associations  and  Working- 
men  of  Fribourg,  Switzerland  (1893)  ;  the  Social 
Christians  of  Germany;  the  Christian  Democrats  of 
Belgium  (1894)  ;  the  Catholic  Association  of  Hol- 
land   (1897)  ;   the    Second    Congress    of   Christian 

^  Cf.  "Poverty,"  by  Robert  Hunter,  ch.  V. 
"  "The  wife  become  wage  worker  is  no  longer  a  wife." 
Quoted  in  Turman's  "Le  Catholicisme  social,"  p.  55. 
133 


A    LIVING    WAGE 

Workingmen  at  Rheims  (1894)  ;  the  Catholic  dele- 
gates to  the  Industrial  Congress  for  the  Protection 
of  Workingmen  at  Zurich  (1897);  the  Count  de 
Mun ;  and  Cardinal  Manning.  * 

(c)  Food.  The  laborer  should  have  food  suffi- 
cient in  quantity,  quality  and  variety  to  maintain 
himself  and  the  members  of  his  family  in  a  normal 
condition  of  health  and  vitality. 

(d)  Clothing.  He  should  be  able  to  provide  him- 
self and  family  with  clothing  adapted  in  quantity 
and  quality  to  the  reasonable  requirements  of  com- 
fort. In  addition  to  being  protected  against  the  in- 
clemency of  the  climate,  they  ought  to  have  the 
means  of  appearing  in  becoming  attire  on  "social" 
occasions,  in  school,  in  church,  and  in  public  gath- 
erings. It  is  impossible  to  state  precisely  the  mini- 
mum that  is  reasonable  for  this  purpose,  but  speak- 
ing generally  we  may  say  that  the  laborer  and  his 
family  should  possess  an  outfit  of  "holiday"  apparel, 
distinct  from  their  ordinary  or  "everyday"  gar- 
ments. This  is  essential  to  enable  them  to  appear 
among  their  fellows  without  hurt  to  that  self-respect 
and  natural  pride  which  are  indispensable  to  decent 
living. 

(e)  Shelter.  Under  this  head  it  is  sufficient  to 
say  that  the  dwelling  occupied  by  the  laborer  and 
his  family  ought  to  consist  of  at  least  five  rooms, 
and  in  general  conform  to  the  requirements  of  rea- 
sonable comfort.  Three  rooms  (one  for  the  par- 
ents, one  for  the  male  and  one  for  the  female  chil- 
dren)  are  the  minimum  for  sleeping  accommoda- 

^  Idem,  pp.  50-58. 

134 


ESTIMATE    OF    A    LIVING    WAGE 

tions,  and  it  would  seem  that  at  least  two  rooms  are 
required  for  all  other  purposes.  As  to  equipment, 
the  house  must,  of  course,  be  provided  with  a  rea- 
sonable stock  of  furniture  and  utensils,  and  with  the 
amount  of  heat,  light  and  drainage  essential  to 
health  and  comfort. 

The  material  requisites  of  decent  living  may, 
therefore,  be  summed  up  as  a  reasonable  amount  of 
food,  clothing  and  shelter  for  himself  and  his  wife 
as  long  as  they  live ;  and  for  four  or  five  children 
until  these  have  reached  the  age  of  sixteen  years. 

2.  Besides  the  needs  that  are  constant,  actually 
existent,  there  are  others  that  are  intermittent,  and 
still  others  that  will  be  felt  only  in  the  future.  The 
laborer's  remuneration  ought  to  be  sufficiently  large 
to  enable  him  to  provide  against  accidents,  sickness 
and  old  age.  If  it  does  not  he  will,  when  tempo- 
rarily or  permanently  incapacitated  for  work,  be- 
come a  burden  on  the  community  or  on  his  children. 
In  the  latter  case  the  wages  received  by  the  children 
would  have  to  be  increased  beyond  their  own  re- 
quirements. This  is  not  in  accord  with  the  normal 
order  of  things,  which  suggests  that  a  man's  life 
toil  should  bring  him  sufficient  provision  for  his 
life  needs. 

3.  Finally,  the  laborer  and  his  family  have  cer- 
tain mental  and  spiritual  needs,  the  satisfaction  of 
which  is  essential  to  right  living.  The  chief  among 
them  are:  a  moderate  amount  of  amusement  and 
recreation;  education  in  the  primary  branches  of 
instruction  for  the  children;  some  periodical  and 
other  literature;  membership  in  certain  organiza- 

135 


A    LIVING    WAGE 

tions,  such  as  benefit  societies  and  Labor  Unions ; 
and  last,  but  by  no  means  least,  the  means  c>f  fulfill- 
ing in  a  becoming  manner  the  obligations  imposed 
by  charity  and  religion. 

Food,  clothing,  shelter,  insurance,  and  mental  and 
spiritual  culture — all  in  a  reasonable  degree — are, 
therefore,  the  essential  conditions  of  a  decent  live- 
lihood. Remuneration  inadequate  to  secure  all  of 
these  things  to  the  laborer  and  his  family  falls  be- 
low the  level  of  a  Living  Wage. 

How  shall  we  express  these  requisites  in  terms  of 
money?  The  varying  cost  of  living  at  different 
times  and  in  different  sections  of  the  country  is  alone 
sufficient  to  render  a  single  general  answer  exceed- 
ingly difficult.  Nevertheless,  an  approximation  can 
be  made  that  will  appeal  to  all  fair-minded  men  as 
conservative  and  just,  and  will  indicate  with  con- 
siderable definiteness  an  ideal  of  practical  and 
practicable  justice  that,  alas !  is  yet  very  far  from 
being  realized. 

Professor  Albion  W.  Small,  who  is  at  the  head 
of  the  Department  of  Sociology  in  the  University 
at  Chicago,  and  who  is  one  of  the  leading  author- 
ities of  the  world  in  that  science,  declared  a  few 
years  ago:  "No  man  can  live,  bring  up  a  family, 
and  enjoy  the  ordinary  human  happiness  on  a  wage 
of  less  than  one  thousand  dollars  a  year. . .  .All  wa- 
ges should  be  paid  within  a  certain  scale.  Let  no  man 
be  paid  less  than  the  purchase  capacity  of  one  thou- 
sand dollars,  which,  I  think,  is  the  least  a  man  can  live 
on  comfortably,  educate  his  children,  provide  com- 
fortably for  a  family,  and  enjoy  some  human  com- 
136 


ESTIMATE    OF    A    LIVING    WAGE 

forts.  Let  no  man  be  paid  more  than  fifty  thousand 
dollars,  which  is  the  salary  of  the  President  of  the 
United  States."^ 

The  Statistics  presented  in  the  Sixth,  Seventh 
and  Eighteenth  Annual  Reports  of  the  U.  S.  Bureau 
of  Labor  indicate  that  Professor  Small's  estimate 
is  not  too  high  if  two  conditions  be  verified :  first, 
that,  as  he  would  wish,  women  and  minors  do  not 
become  wage  earners ;  and,  second,  that  the  laborer 
and  his  family  be  enabled  to  approach  a  certain  de- 
gree of  variety  and  fulness  of  life  which  is  not  ab- 
solutely required  for  what  most  men  would  regard 
as  a  reasonable  and  comfortable  level  of  existence. 
To  support  his  children,  both  boys  and  girls,  from 
the  years  of  sixteen  until  twenty-one,  and  his 
daughters  from  the  latter  age  until  they  marry, 
would  add  very  much  to  the  cost  of  the  family's 
living  as  above  formulated.  It  is  more  than  prob- 
able that  society  and,  generally  speaking,  its  women 
and  minors,  would  be  benefited  if  these  were  ex- 
cluded from  the  ranks  of  the  wage  workers.  Boys 
would  have  greater  opportunities  of  general  educa- 
tion and  special  industrial  training,  and  girls  would 
necessarily  be  better  equipped  for  and  more  willing 
to  accept  woman's  true  functions,  those  of  wife, 
mother,  mistress  of  the  home,  and  moulder  of  the 
moral  and  spiritual  life  of  the  race.  Moreover,  the 
withdrawal  of  these  two  classes  from  the  field  of 
paid  employments  would,  by  eliminating  a  most 
demoralizing  and  intractable  form  of  competition, 

^  Lecture  delivered  before  the  Central  Y.  M.  C.  A.  of 
Chicago,  as  reported  in  the  "Chicago  Chronicle"  of  Dec.  13, 
1901. 

137 


A    LIVING    WAGE 

bring  about  a  general  rise  in  the  wages  of  men  which 
would  go  very  far  toward  making  actual  the  ideal 
of  Professor  Small.  However,  it  must  be  admitted 
that  this  condition,  however  much  to  be  desired, 
cannot  in  any  accurate  use  of  language  be  described 
as  indispensable  to  right  and  reasonable  living. 
Similarly  with  the  added  amount  of  general  comfort 
that  a  wage  of  one  thousand  dollars  per  year  would 
probably  insure:  the  laborer  would  be  greatly 
benefited  by  it ;  for  he  is  a  man,  and  man's  capacity 
for  progress  is  infinite;  but  our  concern  here  is 
merely  with  the  reasonable  and  irreducible  mini- 
mum. 

Mr.  John  Mitchell  estimates  the  minimum  wage 
that  will  maintain  a  workingman  and  his  family 
according  to  the  "American  standard,"  as  $600  a 
year.  "It  is,  of  course,  true  that  this  estimate  ap- 
plies more  exactly  to  workmen  in  towns  of  from  five 
thousand  to  one  hundred  thousand  inhabitants,  than 
it  does  to  other  places.  In  speaking  of  $600  for 
unskilled  workmen,  I  do  not  mean  to  include  farm 
hands  or  men  in  rural  communities,  where  the  cost 
of  living  is  less  and  the  standard  of  Hving  not  so 
high.  On  the  other  hand,  in  cities  of  over  one  hun- 
dred thousand,  and  especially  in  cities  of  over  half 
a  million,  $600  would,  in  my  opinion,  be  insufficient 
to  maintain  this  standard  for  unskilled  workingmen. 
This  is  more  especially  true  of  the  city  of  New 
York,  where  the  cost  of  maintaining  a  fair  standard 
of  living  would  be  much  greater,  owing  to  excessive 
rents,  and  where  the  ideal  of  a  separate  small  house 
for  the  workman  must  itself  be  given  up.  For  the 
138 


ESTIMATE    OF    A    LIVING    WAGE 

great  mass  of  unskilled  workmen,  however,  resid- 
ing in  towns  and  cities  with  a  population  of  from 
five  thousand  to  one  hundred  thousand,  the  fair 
wage,  a  wage  consistent  with  American  standards 
of  living,  should  not  be  less  than  $600  a  year."  ^ 

On  page  688  of  the  Sixth  Annual  Report  of  the 
Commissioner  of  Labor,  there  is  a  letter  from  Mrs. 
J.  E.  B.,  the  wife  of  a  workingman.  The  family  is 
seven  in  number,  and  therefore  may  be  regarded  as 
normal.  The  earnings  of  the  husband  amount  to 
$576  per  year.  In  her  letter  the  wife  gives  a  de- 
tailed account  of  the  average  family  expenditures 
for  all  purposes  except  clothing  and  sundries,  and 
describes  at  some  length  her  truly  ingenious  planning 
to  economize  in  the  matter  of  food.  It  is  safe  to 
say  that  seven  out  of  ten  housewives  would  be  un- 
able to  show  as  large  results  for  the  same  outlay. 
Yet  she  is  obliged  to  confess  that  in  her  efforts  to 
make  both  ends  meet  she  is  like  "the  kitten  that 
twirled  round  and  round  trying  to  catch  its  tail." 
The  object  sought  was  always  in  view,  but  never 
within  reach.  Any  humane  man  or  woman  who 
will  peruse  carefully  this  interesting  and  instructive 
letter  will  be  forced  to  the  conclusion  that,  among 
the  goods  and  opportunities  enjoyed  by  the  members 
of  this  family,  not  one  was  in  excess  of  the  bare 
requisities  of  decent  Hving,  and  that  the  cost  there- 
of ($576)  was  less  than  it  would  be  in  the  majority 
of  households. 

The  following  is  an  itemized  statement  of  the 
average  cost  of  living  for  one  year  of  2,132  families 

^"Organized  Labor,"  pp.  117,  118. 
139 


A    LIVING    WAGE 

described  in  the  Seventh  Annual  Report  of  the  Com- 
missioner of  Labor,  pages  1678- 1682.  The  average 
size  of  these  famiHes  is  5.7,  which  is  somewhat  less 
than  the  number  that  we  have  taken  to  be  normal. 

Food    $287.06 

Rent     72.58 

Fuel     3575 

Lighting    4.90 

Clothing 107.40 

Taxes    5.43 

Insurance  (property)    6.47 

Insurance  (life)     20.22 

Organizations   (labor)    6.06 

Organizations  (other) 6.60 

Religion 10.29 

Charity    2.80 

Furniture  and  Utensils 19-79 

Books  and  Newspapers 5.35 

Amusements  and  Vacations 9.36 

Intoxicating  Liquors    15-98 

Tobacco    10.48 

Sickness  and  Death 22.31 

Other  Purposes  38.19 

Total  for  all  Purposes $687.02 

The  total  average  expenditure  of  the  families  in- 
cluded in  this  summary  is  stated  in  the  Report  to  be 
$610.61,  instead  of  the  figure  just  given.  The 
discrepancy  arises  from  the  fact  that  hundreds  of  the 
families  investigated  made  no  outlay  on  account  of 
several  of  the  items  specified  in  the  list,  or  that  their 
140 


ESTIMATE    OF    A    LIVING    WAGE 

expenditures  under  some  heads  were  not  included 
in  the  computations  of  the  Report.  For  example, 
the  expenditure  for  insurance  on  property  is  given 
for  only  198  families ;  the  average  contribution  to 
labor  organizations  is  based  on  reports  from  only 
155  families,  and  so  on.  Hence  the  total  actual 
expenditures  of  all  the  families,  for  all  purposes, 
divided  by  their  number  (2,132)  gave  $610.61,  in- 
stead of  $687.02.  The  latter  sum  would  constitute 
the  actual  average  if  the  families  that  expended  noth- 
ing (or  whose  expenditures  were  not  taken  into 
account)  for  certain  of  the  items  specified,  paid  out 
under  these  heads  as  much  as  did  those  families 
whose  accounts  were  included  in  the  Report.  This 
is  a  legitimate  method  of  computation,  since  all  of 
the  purposes  indicated  in  the  list  are  necessary  ele- 
ments in  the  cost  of  living.  It  was  the  total  yearly 
outlay  of  such  families  as  met  all  these  wants, 
not  the  expenditures  of  those  that  were  unable  to 
meet  some  of  them,  that  was  normal.  Let  us  examine 
briefly  the  separate  items,  to  see  whether  any  of  them 
ought  to  be  dispensed  with,  increased,  or  dimin- 
ished, in  estimating  the  content  of  a  Living  Wage. 

The  average  expenditure  for  food  was  $287.06. 
In  all  of  the  Northern  states  but  one,  and  in  two 
of  the  states  south  of  Mason  and  Dixon's  Line,  the 
average  was  considerably  above  this  sum.  On  the 
other  hand,  the  average  food  account  in  the  family 
that  we  have  considered  in  particular  (that  of  Mrs. 
J.  E.  B.)  was  only  $220.62.  With  regard  to  this 
difference  of  $66.44,  it  is  to  be  noted  that  the  ma- 
141 


A    LIVING    WAGE 

jority  of  housewives  are  less  competent  managers 
than  this  lady,  and  that,  despite  her  exceptional 
economizing,  her  family  did  not  have  a  reasonable 
amount  of  healthful,  nourishing  food.  Hence  it 
seems  fair  to  add  some  fifteen  dollars  to  her  ex- 
penditures under  this  head,  making  the  reasonable 
minimum  $235.00,  which  is  still  $52.06  less  than 
the  sum  in  the  list  of  the  Labor  Report. 

The  annual  outlay  for  rent  in  our  list  is  $72.58. 
The  average  number  of  rooms  per  family  repre- 
sented by  this  expenditure  was  4.7,  which  is  certain- 
ly the  minimum  that  is  consistent  with  the  require- 
ments of  comfort,  health  and  decency.  In  all  the 
Southern  States  but  one,  the  rent  cost  was  below 
this  average  of  $72.58,  but  the  houses  which  hired 
for  this  amount  averaged  only  3.4  rooms  each. 
Moreover,  it  must  be  borne  in  mind  that  all  the 
dwellings  concerned  were  occupied  by  operatives  in 
the  cotton  industry,  and  therefore  situated  in  towns 
or  smaller  cities,  where  rent  is  considerably  lower 
than  in  the  great  centers  of  population.  To  get 
anything  like  a  fair,  general  average  cost  of  decent 
housing,  we  must  increase  this  figure  to  $84.00. 
That  is  only  seven  dollars  per  month,  which,  if  any 
reliance  may  be  placed  on  ordinary  experience,  is 
less  than  five-room  houses  can  be  obtained  for  in 
most  instances. 

For  fuel  the  average  expenditures  of  the  families 
in  the  Report  was  $35.75.  It  cost  Mrs.  J.  E.  B. 
only  $24.00,  but  she  was  able  to  buy  coal  at  two 
dollars  per  ton.  This  is  notoriously  less  than  the 
retail  price  of  that  commodity    (even  the   "soft" 

142 


ESTIMATE    OF    A    LIVING    WAGE 

varieties)  in  most  localities.  However,  let  us  re- 
duce the  list  figure  to  $30.00. 

"Lighting,  $4.90,"  is  surely  a  sufficiently  low  esti- 
mate. 

"Clothing  $107.40,"  with  the  average  number  of 
children  3.5  per  family,  while  the  average  number  in 
families  of  full  size  is,  as  already  noted,  four  or  five. 
The  parents  of  the  families  entering  into  the  Report 
were  of  various  ages  of  matrimonial  existence,  from 
the  recently  wedded  upward.  The  average  number 
of  children  per  family,  and  the  average  cost  of 
clothing  them,  was  consequently  smaller  than  would 
have  been  the  case  if  all  the  couples  had  been  married 
some  sixteen  or  seventeen  years.  It  is  obvious  that 
the  maximum  present  cost  of  rearing  a  family  is 
not  reached  before  that  period.  Nevertheless  we 
shall  allow  the  above  figures  to  stand  unchanged. 

"Taxes,  $5.40."  Nearly  one-half  of  the  families 
investigated  made  no  returns  for  this  account.  Let 
us  reduce  the  amount  to  $3.00. 

"Insurance  on  property,  $6.47."  This  seems 
sufficiently  low,  but  we  shall  make  it  $5.00. 

"Life  Insurance,  $20.28."  Let  this  be  entirely 
eliminated  on  the  assumption  that  from  the  time  of 
his  majority  until  his  family  attains  its  full  numeric- 
al size,  and  between  the  period  at  which  the  first  of 
his  children  becomes  self-supporting  and  that  at 
which  he  ceases  to  work  himself,  he  will  put  by 
enough  to  provide  for  his  old  age.  His  living  ex- 
penses will,  of  course,  be  smaller  during  these  two 
intervals  than  when  he  has  to  support  four  or  five 
children.     We  shall  also  assume  that  his  total  sav- 

143 


A    LIVING    WAGE 

ings  are  sufficient  to  cover  the  annual  expenditure 
for  "Sickness  and  Death,"  which,  according  to  the 
Report,  is  $22.21.  As  human  nature  goes,  this 
places  upon  the  laborer  an  apparently  unreasonable 
burden,  but  in  order  to  guard  against  even  the  ap- 
pearance of  generosity,  we  shall  let  it  remain. 

"Labor  Organizations,  $6.06" ;  "Other  Organiza- 
tions, $6.60."  When  we  recall  the  imperative 
necessity  of  Trades  Unions,  and  when  we  reflect  that 
"other  organizations"  include  social  and  mutual- 
benefit  associations,  we  are  bound  to  conclude  that 
these  figures  could  not  well  be  reduced. 

"Religion,  $10.29" ;  "Charity,  $2.80."  Both  items 
seem  very  small. 

"Furniture  and  Utensils,  $19.79," — ^^  irreducible 
minimum. 

"Books  and  Newspapers,  $5.35."  Schoolbooks 
for  the  children  are  included  in  this  amount.  It  is 
a  ridiculously  small  expenditure  for  the  intellectual 
life  of  an  American  family  in  the  twentieth  cen- 
tury.    It  may  reasonably  be  raised  to  $10.00. 

"Amusements  and  Recreation,  $9.36."  This  is 
about  one-third  of  the  expenditures  for  these  pur- 
poses by  the  same  class  of  laborers  in  Europe.  ^  It 
ought  to  be  at  least  $20.00. 

"Intoxicating  Liquors,  $15.98."  Let  us  reduce 
it  to  $10.00. 

"Tobacco,  $10.48."     Reduced  to  $8.00. 

"Sickness  and  Death,  $22.31."  As  already  stated, 
we  assume  that  the  laborer  makes  provision   for 

^  "Seventh  Annual  Report  of  the  Department  of  Labor/'  p. 
852. 

144 


ESTIMATE    OF    A    LIVING    WAGE 

these  needs  from  his  savings  during  the  earHer  years 
of  his  adult  life. 

"Other  Purposes,  $38.19."  To  one  who  reflects 
for  a  moment  on  the  numerous  possibilities  of  legit- 
imate expenditure  that  must  come  under  this  head, 
the  figure  given  will  seem  incapable  of  further  re- 
duction. 

A  "revised  list"  of  the  minimum  annual  expendi- 
tures of  a  workingman's  family  would,  therefore, 
take  the  following  proportions : 

Food    $235.00 

Rent 84.00 

Fuel  30.00 

Lighting    4.90 

Clothing    107.40 

Taxes    3.00 

Property  Insurance 5.00 

Labor  Organizations 6.06 

Other   Organizations    6.60 

Religion    10.29 

Charity    2.80 

Furniture  and  Utensils   19-79 

Books  and  Newspapers   10.00 

Amusements  and  Vacations  20.00 

Intoxicating  Liquors    10.00 

Tobacco    8.00 

Other   Purposes    38.19 

Total  for  all  purposes $601.03 

The  Sixth  Annual  Report  of  the  Commissioner  of 
Labor  presents  the  results  of  an  investigation  into 
10  14s 


A    LIVING    WAGE 

the  cost  of  living  in  the  coke  and  iron  ore  indus- 
tries. ^  The  average  yearly  expenditure  for  all  pur- 
poses of  249  families  in  the  former  industry  was 
$462.69;  of  165  families  in  the  latter,  $390.93. 
These  costs  are  obtained  by  dividing  the  number  of 
families  in  each  group  (249  and  165)  into  the  total 
amount  annually  expended  by  the  group.  As  we 
found  to  be  the  case  in  the  cotton  group,  so  here, 
the  dividend,  that  is,  the  grand  total  of  expenditures, 
is  lessened  by  the  fact  that  many  of  the  families 
paid  out  nothing  under  the  head  of  some  of  the 
items  represented  in  said  total.  For  example,  only 
211  of  the  249  families  in  the  coke  group  paid  rent; 
of  the  remaining  thirty-eight,  five  failed  to  send  in 
reports  to  the  investigators,  and  the  other  thirty- 
three  owned  the  houses  in  which  they  resided.  If 
these  thirty-eight  had  paid  the  average  rent  paid 
by  the  211  the  total  outlay  entering  under  the 
head  of  rent  into  the  grand  total,  would  have  been 
to  that  extent  increased  (38  times  $58.19).  A 
similar  observation  is  to  be  made  concerning  all 
but  two  of  the  other  purposes  of  expenditure; 
not  one  of  them  appears  in  the  expense  accounts 
of  all  the  families.  The  pertinent  fact  for  our 
study  revealed  by  the  statistics  of  the  coke  group, 
is  that  a  family  which  would  annually  spend  for 
all  of  the  purposes  represented  in  the  grand  total 
the  average  amounts  that  actually  were  spent  by 
those  families  that  spent  anything  therefor,  would 
have  living  expenses  of  $562.94,  instead  of  $462.69. 
And  every  one  of  these  purposes  of  expenditure 

'Pp.  1300-1311. 

146 


ESTIMATE    OF    A     LIVING    WAGE 

forms  a  necessary  part  of  a  reasonable  standard 
of  living.  Moreover,  the  average  size  of  these 
families  was  only  4.8  members ;  the  outlay  per 
family  on  several  of  the  accounts  was  palpably  in- 
sufficient— rent  being  only  $58.19,  and  representing 
only  3.4  rooms  per  family;  and,  in  general,  the  in- 
dividual and  detailed  descriptions  of  those  families 
paying  rent,  numbering  more  than  five  persons  each, 
and  expending  less  than  $600  per  year,  shows  that 
they  lacked  the  requisites  of  reasonable  comfort.  * 
With  regard  to  the  families  in  the  iron  ore  group, 
it  must  be  observed:  first,  that  by  computing  their 
cost  of  living  according  to  the  method  just  em- 
ployed, we  get  an  annual  expenditure  of  $459.32, 
instead  of  $390.93;  secondly,  there  were  only  5.2 
persons  per  family,  the  yearly  outlay  for  rent  was 
only  $33.11,  the  houses  (  ?)  numbered  only  3.4  rooms 
each,  and  many  of  the  other  costs,  notably  under  the 
heads  of  food,  clothing,  religion,  were  entirely  too 
low;  and,  thirdly,  what  has  been  said  concerning 
those  families  of  the  coke  group  with  a  rent  account, 
more  than  five  members  each,  and  a  total  outlay  of 
less  than  $600  annually — may  be  asserted  with 
emphasis  regarding  similarly  placed  families  in  the 
iron  ore  industry — with  the  possible  exception  of 
those  fortunate  enough  to  own  a  vegetable  garden, 
or  cows,  hogs,  poultry,  etc.  ^  Hence  the  records 
of  these  two  groups  of  families,  whose  cost  of  living 
was  apparently  so  much  lower  than  that  of  the  fam- 
ilies in  the  cotton  industry,  in  reality  confirms  the 

ipp.  1107-1135. 
^'Pp.  1145-1165. 

147 


A    LIVING    WAGE 

conclusion  that  a  normal  family  cannot  live  decently 
on  less  than  $600  per  year. 

Partly  because  of  difficulties  inherent  in  the  situa- 
tion, and  partly  because  complete  and  definite  sta- 
tistics are  lacking,  it  is  impossible  to  state  in  terms 
that  will  be  universally  valid  the  equivalent  of  $600 
per  year  in  daily  wages.  The  reports  of  the  Penn- 
sylvania Bureau  of  Industrial  Statistics  show  that  in 
forty-seven  industries  investigated,  the  percentage 
of  time  during  which  the  men  were  out  of  work 
varied  from  fifteen  in  1893,  to  three  in  1898.  The 
New  York  Bureau  of  Labor  Statistics  exhibits  the 
rate  of  the  unemployed  among  organized  workmen 
(where  it  is  usually  less  than  among  the  unorgan- 
ized) from  1897  to  1901,  as  varying  from  nine  per 
cent,  to  twenty-five  per  cent.  ^  The  Massachusetts 
Labor  Report  of  1887  placed  the  average  unem- 
ployed of  that  state  in  1885  at  ten  per  cent., 
and  the  Commissioner  of  Labor  of  Illinois  estimated 
it  as  twenty-five  per  cent,  in  his  state  in  the  year 
1886.  ^  Mr.  Spahr  is  of  the  opinion  that,  "it  is  a 
prosperous  year  indeed  when  the  average  wage- 
receiver  aggregates  forty-four  full  weeks  of  employ- 
ment." ^  That  would  make  the  percentage  of  lost 
time  fifteen.  Levasseur,  however,  declares  that, 
"the  average  deduction  which  must  be  made  for 
lost  time  is  about  ten  per  cent,  under  ordinary 
circumstances."  *     The     widest     investigation     of 

*  Cf.  Final  Report  of  The  Industrial  Commission,  p.  733. 

*  Cf.  Charles  B.  Spahr's  "Present  Distribution  of  Wealth  in 
the  United  States,"  pp.  100,  loi. 

'  Op.  cit.,  p.  loi. 

*  "The  American  Workman,"  p.  399. 

148 


ESTIMATE    OF    A    LIVING    WAGE 

this  question  is  the  one  made  for  the  Twelfth 
Census,  which  covered  every  occupation  in  the 
United  States.  The  returns  show,  not  the  average 
amount  of  time  lost  by  each  worker,  but  the  number 
and  per  cent,  that  were  idle  during  any  portion  of 
the  year,  and  the  per  cent,  of  these  that  were  un- 
employed during  a  part  or  all  of  different  groups 
of  months.  For  example,  of  those  engaged  in  the 
manufacturing  and  mercantile  industries  28.3  per 
cent,  were  unoccupied  for  some  part  of  the  year :  of 
these  46.5  per  cent,  lost  from  one  to  three  months ; 
42.2  per  cent,  from  four  to  six  months;  and  11.3  per 
cent,  from  seven  to  twelve  months.  ^  A  conserva- 
tive computation  from  this  table  of  returns  indicates 
that  the  percentage  of  unemployment  for  all  occupa- 
tions except  agriculture  and  the  professions,  during 
the  year  covered  by  the  investigation,  1899  and  1900, 
averaged  between  eight  and  ten  per  cent.  And  those 
years  were  unusually  prosperous.  However,  if  we  as- 
sume that  the  average  workingman  loses  only  eight 
per  cent,  of  his  possible  working  time — about  310 
days  per  year,  exclusive  of  legal  holidays — an  annu- 
al income  of  $600  would  mean  a  daily  w^age  of 
$2.10.  In  case  employment  is  absolutely  uninter- 
rupted, these  rates  are  equivalent  to  $1.94  per  day. 

Since  our  estimate  of  $600  is  based  on  the  cost  of 
living  of  families  in  the  cotton  industry  in  the  year 
189 1,  it  is  undoubtedly  too  low  to  serve  as  a  stand- 
ard for  the  whole  country  at  all  times.  House  rent, 
car  fare,  recreation,  social  position,  would  make 
living  dearer  in  the  large  cities  than  in  the  smaller 

*  Volume  on  "Occupations,"  p.  ccxxxv. 
149 


A    LIVING    WAGE 

centers  of  population  in  which  these  families  resid- 
ed. In  New  York,  or  Boston,  or  Chicago,  $600 
would  not,  even  during  periods  of  low  prices, 
obtain  the  irreducible  minimum  of  necessaries 
and  comforts  described  in  our  "revised  list."  It 
would  not  command  that  amount  of  goods  to-day^ 
in  those  towns  in  which  the  figures  of  the  original 
list  were  gathered ;  for  the  cost  of  living  was  six 
per  cent,  less  in  189 1  than  in  1903.  ^  The  conclu- 
sions that  seem  to  be  abundantly  justified  by  the 
facts  brought  out  in  this  chapter  may,  therefore,  be 
stated  as  follows:  first,  anything  less  than  $600  per 
year  is  not  a  Living  Wage  in  any  of  the  cities  of 
the  United  States ;  second,  this  sum  is  probably  a 
Living  Wage  in  those  cities  of  the  Southern  States 
in  which  fuel,  clothing,  food  and  some  other  items 
of  expenditure  are  cheaper  than  in  the  North ;  third, 
it  is  possibly  a  Living  Wage  in  the  moderately  sized 
cities  of  the  West,  North  and  East;  and  fourth,  in 
some  of  the  largest  cities  of  the  last-named  regions, 
it  is  certainly  not  a  Living  Wage. 

Note  to  Second  Edition. — According  to  care- 
ful studies  and  estimates  made  by  several  groups  of 
investigators  in  1906,  the  minimum  cost  of  decent 
living  for  a  family  of  moderate  size  was :  in  New 
York,  $950;  in  Chicago,  $900;  in  Baltimore,  $750; 
while  the  average  for  these  and  several  other  large 
cities  was  $938. 

*  October,  1905. 

^See  Bulletin  No.  53  of  the  Bureau  of  Labor,  pp.  712,  723. 


ISO 


SECTION  III 

ECONOMIC  FACTS  BY 

WHICH  THE  RIGHT 

IS  CONDITIONED 


CHAPTER  VIII 


The  Underpaid  Laborers  of  America:  Their 
Number  and  Prospects 

Place  of  this  and  the  following  chapter  in  the  discussion. 
No  complete  statistics  of  the  underpaid  obtainable.  Partial 
statistics  showing  the  proportion  in  several  industries  at 
the  beginning  and  end  of  the  last  decade.  Conclusion,  that 
at  least  60  per  cent,  of  the  male  adults  get  less  than  $600 
per  annum.  Wages  have  greatly  increased  since  1850,  but 
not  so  rapidly  in  the  last  25  years  as  in  the  preceding  30 
years.  The  forces  that  have  restricted,  and  seem  likely  to 
continue  to  restrict,  the  upward  tendency  of  wages  are: 
(a)  monopolistic  combinations,  which  can  dispense  with 
a  considerable  amount  of  labor  power;  (b)  the  rapid  dis- 
placement of  men  by  machines;  (c)  the  unnecessary  multi- 
plication of  productive  instruments,  causing  overproduction 
and  unemployment.  Mr.  Hobson's  analysis  of  this  phe- 
nomenon. It  may  be  operative  at  all  times  except  those  of 
unusual  industrial  activity.  Fallacy  of  the  older  theory 
which  affirmed  the  impossibility  of  general  over  production. 
Combined  effect  of  the  three  forces  described.  Summary 
and  conclusion. 

The  endeavor  of  the  foregoing  chapters  has  been 
to  show  that  the  laborer  has  a  right  to  a  Living 
Wage,  and  to  state  the  content  of  this  right  in  terms 
of  goods  and  money.  The  correlative  obligation 
rests,  it  has  been  declared,  "on  the  members  of  the 
industrial  community  in  which  the  laborer  lives." 
153 


A    LIVING    WAGE 

The  next  step  would  naturally  be  an  attempt  at  a 
more  specific  definition  of  the  phrase  just  quoted. 
Before  entering  upon  this  task,  however,  we  shall 
try  to  get  some  idea  of  the  proportion  of  American 
adult  laborers  that  to-day  fails  to  receive  a  Living- 
Wage,  and  to  ascertain  whether  this  proportion  is 
likely  to  change  in  the  near  future.  This  inquiry 
will  form  the  subject  matter  of  the  present  chapter. 
In  the  chapter  immediately  following  we  shall  strive 
to  answer  the  question  which  asks  whether  the 
natural  resources  and  productive  powers  of  the 
country  are  sufhcient  to  afford  a  Living  Wage  to  all 
its  inhabitants.  The  discussion  of  these  questions 
will  make  the  whole  treatise  more  concrete,  and 
will  give  it  more  practical  significance.  As  used 
hereafter,  the  phrase,  "underpaid  laborers,"  refers 
to  adult  male  workers  whose  remuneration  is  less 
than  $600  per  year. 

No  investigation  has  ever  been  made  which  shows 
the  total  number  of  workingmen  in  the  United 
States  employed  at  any  given  rate  of  wages.  There 
was,  indeed,  an  attempt  in  this  direction  by  the  offi- 
cials in  charge  of  the  Eleventh  Census,  but  it  was  not 
successful.  From  the  results  of  various  partial  in- 
vestigations, however,  we  can  form  a  fairly  accurate 
and  sufficiently  definite  estimate  of  the  number  and 
proportion  of  the  underpaid. 

The  Eleventh  Census  (1890)  gives  the  weekly 
rates  of  wages  and  the  number  of  persons  employed 
at  each  rate  in  fifty  leading  industries  of  165  cities.  ^ 
The  investigation  from  which  these  results  were  ob- 

'Part  II  of  the  Report  on  Manufactures,  p.  xxix. 
154 


UNDERPAID    LABORERS 

tained  was  the  most  extensive  of  its  kind  that  has 
ever  been  made,  as  it  covered  one-fourth  of  the  em- 
ployees in  the  manufacturing  and  mechanical  in- 
dustries. The  number  of  establishments  investigated 
was  44,225,  and  the  number  of  males  sixteen  years 
of  age  and  over  whose  rates  of  wages  were  obtained 
was  757,865.  None  of  the  reports  of  the  Eleventh 
Census  gives  the  number  of  employees  who  were 
above  twenty-one  years,  nor  the  number  of  those 
between  sixteen  and  twenty-one ;  but  from  the  tables 
of  the  Twelfth  Census  we  learn  that  in  1900  the 
proportion  of  males  sixteen  years  of  age  and  over 
in  manufacturing  and  mechanical  pursuits  who 
were  minors,  was  eleven  per  cent.  ^  If  the  same 
proportion  existed  in  1890,  and  if  all  the  minors 
were  among  the  407,693  workers  who  received  less 
than  twelve  dollars  per  week,  forty-eight  per  cent, 
of  the  male  adults  failed  to  get  a  Living  Wage.  ^ 
But  the  wage  returns  upon  which  this  estimate  is 
based  represent  not  merely  wage  receivers  in  the 
ordinary  sense,  but  also  company  officers  and  firm 
members.  According  to  the  Eleventh  Census,  the 
average  income  of  males  above  sixteen  in  the  manu- 

*  Volume  on  "Occupations,"  p.  cxlii.  That  is  to  say,  the 
minors  formed  ii  per  cent,  of  the  whole  number  of  males, — 
laborers,  employers,  and  company  officers, — above  i6  years  of 
age  in  these  occupations.  They  were,  consequently,  a  slightly 
higher  percentage  of  the  laborers  alone,  but  the  difference  is  so 
small  that  it  may  safely  be  disregarded. 

^  The  assumption  that  all  minors  and  women  are  in  the 
underpaid  class  is  made  in  the  case  of  every  group  of  employees 
considered  in  this  chapter.  The  effect  is  to  make  the  propor- 
tion of  male  adults  in  the  class  slightly  less  than  it  actually  is, 
since  some  women  and  minors  certainly  get  more  than  $600  fer 
year.  But  there  is  no  other  available  method  of  even  approx- 
imately distinguishing  the  wages  of  adult  males. 

155 


A    LIVING    WAGE 

facturing  and  mechanical  industries  was  nine  per 
cent,  higher  when  the  latter  classes  were  included 
than  when  they  were  omitted.  Taking  account  of  this 
fact  and  of  the  number  of  income  receivers  appearing 
in  the  highest  paid  group  in  the  table  that  we  are 
considering,  we  may  safely  conclude  that  the  per 
cent,  of  adult  male  wage  earners  getting  less  than 
twelve  dollars  weekly  was  at  least  fifty-one. 

The  Seventh  Annual  Report  of  the  Commissioner 
of  Labor  indicates  that  eighty-four  per  cent,  of 
17,650  employees  in  typical  establishments  in  the 
iron  and  steel  industry  received  in  1891  less  than 
$2.01  per  day.^  According  to  the  Twelfth  Census, 
seventeen  per  cent,  of  this  class  of  workers  in  1900 
were  females  and  boys.  ^  Assuming  that  the  same 
percentage  obtained  nine  years  previous,  we  find  the 
proportion  of  underpaid  adults  among  the  iron  and 
steel  workers  at  that  time  to  be  eightv-one  per  cent. 

The  Fifth  Annual  Report  of  the  Commissioner 
of  Labor  presents  the  rates  of  wages  paid  to  railway 
labor  in  1889.^  Of  the  224,570  employees  repre- 
sented eighty-six  per  cent,  received  less  than  $2.01 
per  day.  When  eight  per  cent,  is  deducted  on  ac- 
count of  females  and  boys  the  proportion  of  adult 
males  that  failed  to  get  this  rate  appears  as  eighty- 
five  per  cent.  * 

In  the  special  report  of  the  Twelfth  Census  (1900) 

»Pp.  840,  841. 

^Volume  on  "Occupations,"  p.  cxlii. 

3  P.  83. 

*  As  in  the  case  of  the  iron  and  steel  workers,  the  percent- 
age of  women  and  minors  is  assumed  to  be  that  prevailing  when 
the  Twelfth  Census  was  made.  See  the  volume  of  the  latter 
on  "Occupations,"  p.  cxlii. 

156 


UNDERPAID    LABORERS 

on  "Employees  and  Wages,"  returns  are  presented 
from  what  was  undoubtedly  the  most  careful  in- 
vestigation that  has  yet  been  made  of  the  rates  of 
wages  obtained  by  different  classes  of  workers.  ^ 
Representative  establishments  were  studied  in  thirty- 
four  "stable  and  normal  industries,"  classified  under 
the  more  general  heads  of  textile,  woodworking,  met- 
alworking,  and  miscellaneous.  As  the  chief  purpose 
of  the  investigation  was  to  show  the  movement  of 
wages  in  the  manufacturing  industry  between  1890 
and  1900,  statistics  were  obtained  for  both  of  these 
years.  The  returns  for  1890  indicate  that  sixty-nine 
per  cent,  of  105,106  males  sixteen  years  of  age  and 
over  received  less  than  $12.50  per  week.  ^  Allowing 
eight  per  cent,  for  lost  time,  this  is  less  than  $600 
annually.  When  eleven  per  cent,  is  deducted  on 
account  of  minors  the  proportion  of  underpaid  adult 
males  appears  as  sixty-six  per  cent. 

So  much  for  the  wages  prevailing  in  1889,  1890, 
and  1891.  Of  the  condition  of  industry  in  1900  the 
report  on  "Manufactures"  of  the  Twelfth  Census 
says :  "It  was  a  time  of  special  activity  and  produc- 
tivity of  manufactures" ;  "the  volume  of  industry 
had  nearly  reached  its  high-water  mark" ;  and 
furthermore,  "the  same  general  conditions  prevailed 
in  1890" ;  "there  has  been  no  decade  in  which  busi- 
ness conditions  were  so  nearly  alike  at  its  beginning 
and  at  its  end."  ^  The  language  of  the  Census  Re- 
port is  confirmed  by  the  "Aldrich  Report"  and  the 
monthly  Bulletins  of  the  Bureau  of  Labor,  which 

>  Pp.  2-779. 
2  Pp.  2-614. 
'Part  I,  p.  lix. 

157 


A    LIVING    WAGE 

show  that  in  1889,  1890,  and  1891  the  general  level 
of  wages  was  higher  than  the  average  of  the  decades 
immediately  preceding  and  following.  ^ 

The  special  investigation  discussed  in  the  last 
paragraph  but  one,  found  that  sixty-eight  per  cent, 
of  160,267  males  of  sixteen  years  and  over  were 
paid  less  than  $12.50  per  week  in  1900.  ^  Eliminat- 
ing eleven  per  cent,  for  minors,  we  see  that  the 
proportion  of  adult  males  that  failed  to  get  a  Living 
Wage  in  typical  establishments  in  the  manufactur- 
ing industry  was  sixty-four  per  cent. 

Another  table  based  upon  this  same  investigation, 
containing  returns  from  some  establishments  not 
represented  in  the  table  just  considered,  and  omit- 
ting some  of  those  included  in  the  latter,  discloses 
the  fact  that  sixty-six  per  cent,  of  156,552  males  six- 
teen years  and  over  obtained  less  than  $12.50  per 
week.  ^  With  eleven  per  cent,  deducted  for  minors, 
the  proportion  of  underpaid  male  adults  in  this  group 
in  1900  was  sixty-two  per  cent. 

According  to  the  Thirteenth  Annual  Report  of 
the  Interstate  Commerce  Commission  on  the  Sta- 
tistics of  Railways,  eighty-two  per  cent,  of  the  1,008- 
068  persons,  exclusive  of  officers,  in  this  industry 
in  1900  received  at  that  time  wages  that  averaged 
less  than  $2.05  per  day.  *  The  Sixteenth  Annual 
Report  of  the  Commission  shows  that  in  1903  sixty- 
nine  per  cent,  of  the  1,302,494  railway  employees — 
officers  of  the  roads  again  being  excluded — obtained 

*  Cf .  Ely,  "Evolution  of  Industrial  Society,"  pp.  112,  113. 
^"Employees  and  Wages,"  pp.  2-614. 
®  "Employees  and  Wages,"  pp.  616-779. 

^  Pp-  34,  40- 

IS8 


UNDERPAID    LABORERS 

average  wages  of  less  than  $2.09  daily.  ^  Eliminat- 
ing eight  per  cent,  on  account  of  women  and  minors, 
we  see  that  the  average  per  cent,  of  underpaid  adult 
males  for  the  two  years  was  seventy-two.  It  must 
be  noted  that  this  estimate  is  based  on  the  Commis- 
sion's statement  of  the  average  rates  paid  to  the 
different  classes  of  employees,  and  consequently  that 
many  individuals  in  some  of  the  classes  in  which  the 
average  level  was  below  $2.10  per  day,  received  a 
higher  remuneration.  On  the  other  hand,  many 
members  of  classes  whose  average  was  above  that 
rate  obtained  less.  Probably  one  group  balances  the 
other. 

A  partial  confirmation  of  these  estimates  of  the 
proportion  of  underpaid  male  adults  at  the  begin- 
ning and  end  of  the  last  decade  of  the  nineteenth 
century  is  obtained  from  statistics  presented  by  sev- 
eral of  the  state  labor  bureaus.  A  noteworthy  fea- 
ture of  these  returns  is  that  they  represent  a  much 
larger  proportion  of  all  the  employees  in  their  re- 
spective states  than  do  the  foregoing  statistics  with 
regard  to  the  country  at  large.  Moreover,  they  are 
all  from  states  in  the  North  and  West,  in  which 
wages  are  at  least  up  to  the  average  rates  for  the 
whole  United  States.  Only  a  summary  will  be  given 
of  the  estimates  based  on  state  statistics.  For  the 
sake  of  a  more  satisfactory  and  comprehensive  view 
of  the  entire  field,  the  table  includes  a  summary  of 
the  estimates  already  given  in  detail. 

» Pp.  38,43. 


159 


A    LIVING    WAGE 

Number     Per  Cent, 
of  Adult      of  Adult 
Employees  and  Years  Males  Males 

Represented:  Represent-      Under- 

ed:  paid: 

n  50  Manufac.  Industries,  1890,^  757365  51 
n  Iron  and  Steel,  1891,^  17,650         81 

n  Railway  Occupations,  1889,^  206,604  85 
n  34  Manufac.  Industries,  1890,*  93.544  66 
n  34  Manufac.  Industries,  1900,^  142,638  64 
n  34  Manufac.  Industries,  1900,^  138,331  62 
n  Railway  Occupations, 

1900  and  1903,^  2,125,717         72 

n  Manufac,  Mass.,  1890  and  1891,®  367,311  59 
n  Manufactures,  Wis,,  1891,®  70,326         61 

n  Manufac,  Minn.,  1899  and  1900,^°  99,872  53 
n  Manufac,  Mass.,  1899  and  1900,  511,727  64 
n  Manufac,  Wis.,  1899,  1900,  1901,"  217,522  75 
n  Manufac,  N.  J., 

1899,    1900,    1901,^*  387,903        60 

En  Manufac,  III,  1900  and  1901,^*     135,890        58 
No  attempt  is  made  to  estimate  the  total  number 
of  underpaid  workers  represented  in  the  table,  be- 
cause many  of  them  are  counted  more  than  once  in 

^  Eleventh  Census,  "Manufactures,"  Pt.  II,  p.  xxix. 

*  Seventh  Annual  Report  of  Com.  of  Labor,  pp.  840,  841. 
^  Fifth  Annual  Report  of  Com    of  Labor,  p.  83. 

*  Twelfth  Census,  "Employees  and  Wages,"  pp.  2-614. 

*  Ibidem. 

'  Idem,  pp.  616-779. 

'  Thirteenth  &  Sixteenth  Reports  of  Interstate  Com.  Com- 
mission, pp.  34,  40  ;  38,  43. 

*  Annual  Statistics   of  Manufactures  for  1891. 
"Report  of  Bureau  of  Labor  Statistics  for  1891-92. 
"Report  of  Bureau  of  Labor  for  1899-1900. 
"Annual  Statistics  of  Manufactures  for  1900. 
'^Report  of  Bureau  of  Labor  Statistics  for  1900-01. 
"Reports  of  Bureau  of  Labor  Statistics  for  1900  &  1901. 
"Report  of  Bureau  of  Labor  Statistics  for  1902. 

160 


UNDERPAID    LABORERS 

the  summaries,  and  the  entire  number  represented 
is  small  relatively  to  the  whole  number  of  underpaid 
in  the  United  States.  The  important  feature  of  the 
table  is  the  percentages,  which  may  be  taken  as  fair- 
ly representative  of  average  wage  conditions  in 
manufacturing  and  railway  industries.  And  the 
general  level  of  remuneration  in  these  two  fields  is 
undoubtedly  quite  as  high  as  the  average  of  all  the 
other  urban  occupations.  It  is  to  be  noted,  more- 
over, that  these  precentages  reflect  the  conditions 
of  1890  and  1 900- 1 903,  when  wages  were  about  as 
high  as  they  are  at  present  (1905)  fully  as  high  as 
the  average  of  the  last  fifteen  years,  and  higher  than 
that  of  the  last  twenty-five  years. 

The  majority  of  the  percentages  are  above  sixty, 
while  the  only  notable  percentage  below  that  figure 
is  the  first  one  in  the  table.  The  Eleventh  Census 
indicates  that  only  fifty-one  per  cent,  (approximate- 
ly) of  the  male  adults  employed  in  manufacturing  in- 
dustries in  1890  received  less  than  twelve  dollars  per 
week.  Yet  the  special  investigation  undertaken  by 
the  director  of  the  Twelfth  Census  shows  that  the 
proportion  obtaining  under  $12.50  per  week  in  the 
same  industry  the  same  year,  was  sixty-six  per  cent. 
The  investigation  from  which  the  smaller  figure  was 
drawn  covered  a  much  larger  number  of  men  than 
did  the  one  just  mentioned,  but  there  is  every  reason 
to  believe  that  it  was  less  scientifically  and  carefully 
carried  out.  Moreover,  investigations  of  the  manu- 
facturing industries  of  Massachusetts  and  Wisconsin 
for  this  same  year  1890  developed  the  fact  that  the 
percentages  of  underpaid  in  these  states  were  re- 

II  161 


A    LIVING    WAGE 

spectively  fifty-nine  and  sixty-one.  It  is  probable 
therefore  that  sixty-six  per  cent,  is  nearer  the  actual 
figure  than  fifty-one.  When  due  weight  is  given  to 
all  the  percentages  in  the  table  the  conclusion  seems 
justified  that  at  least  sixty  per  cent,  of  the  adult  male 
workers  in  the  cities  of  the  United  States  are  to-day 
(1905)  receiving  less  than  $600  annually.^ 

What  of  the  future  ?  Do  the  wages  of  the  poorest 
paid  classes  show  any  tendency  to  increase?  All 
students  of  the  subject  admit  that  wages  as  a  whole 
have  greatly  increased  since  1850,  The  necessaries 
and  comforts  of  life,  on  the  other  hand,  seem  to  be 
at  about  the  same  price-level  that  prevailed  at  that 
date.^  The  net  result,  therefore,  is  a  considerable 
improvement  in  the  condition  of  the  laboring  classes 
generally,  since  the  middle  of  the  last  century. 

There  are,  however,  serious  reasons  for  thinking 
that  the  upward  movement  of  wages  has  been  much 
smaller  during  the  last  twenty-five  years  than  it  was 
during  the  preceding  thirty  years.  The  census  of  1890 
gives  us  no  definite  information  concerning  the 
course  of  wages  during  the  decade  immediately  pre- 
ceding that  date,  because  it  differed  in  the  scope  and 
form  of  its  inquiry  from  the  census  of  1880.     Hence 

^  Writing  in  the  "Annals  of  the  American  Academy  of 
Political  and  Social  Science,"  September,  1904,  Mr.  Wm. 
English  Walling  estimates  that  more  than  two-thirds  of  the 
male  adult  laborers  fail  to  get  $600  per  year,  but  his  argument 
is  not  altogether  conclusive. 

^According  to  the  Aldrich  Report  (pp.  8,  9)  the  cost  of 
living  (rent  excluded)  was  considerably  higher  in  i860  than  in 
1850,  but  there  was  a  decline  of  5.6  per  cent,  from  i860  to 
1891.  Between  the  latter  year  and  1903,  it  rose  (rent  again 
excluded)  6.3  per  cent.  (Bulletin  No.  S3  of  the  Bureau  of 
Labor,  p.  72^.)     Since  1903  prices  have  fallen  somewhat. 

162 


UNDERPAID    LABORERS 

we  are  warned  by  those  in  charge  of  the  former  that 
the  wage  statistics  of  the  two  censuses  can  not  be 
compared.  ^  The  Aldrich  Report  declares  that  the 
rise  in  wages  during  this  decade  amounted  to  twelve 
per  cent,^  This  estimate  has  been  severely  criticized. 
It  has  been  asserted  that  the  establishments  selected 
for  investigation  were  not  truly  representative  of 
their  respective  classes.  For  example,  one  dry  goods 
store  and  one  grocery  store,  employing  together  less 
than  thirty  clerks,  were  taken  as  typical  of  the  whole 
retail  business ;  and  the  exceptionally  high  wages 
that  they  paid,  as  representative  of  the  remunera- 
tion of  the  whole  of  this  class  of  workers.  Again, 
it  is  charged  that  the  statisticians  who  summarized 
the  returns  of  the  investigation  were  in  sympathy 
with  its  political  aim,  which  was  to  show  the  great- 
est possible  increase  in  wages.^  Thus,  in  computing 
the  average  wages  paid  in  a  certain  brewery — the 
only  establishment  in  that  industry  from  which 
returns  had  been  secured — they  put  the  head  brewer, 
who  received  $23.96  per  day,  in  a  series  by  himself. 
He  was,  accordingly,  given  as  much  weight  in  deter- 
mining the  average  for  the  whole  establishment  as 
each  one  of  the  other  classes  of  workmen.  One  of 
these  classes  contained  thirty-three  men.  In  conse- 
quence of  this  method,  the  average  wage  of  the 
brewery  appeared  as  $4.12  per  day,  although  a  ma- 
jority of  the  employees  actually  received  less  than 
two  dollars.     A  further  and  more  far  reaching  result 

^"Abstract  of  the  Eleventh  Census,"  p.  139. 
2  P.  14. 

*Cf.     Spahr,    "Present    Distribution    of    Wealth    in    the 
United  States,"  p.  106,  sq. 

163 


A    LIVING    WAGE 

was  that  the  quotations  for  the  brewing  industry 
presented  in  the  Aldrich  Report  are  seventy  per  cent, 
too  high.  As  Professor  Bullock  remarks,  "this 
typical  brewer  who  receives  over  $6,cxx)  per  year. . . 
. . .  was  certainly  worth  that  amount  for  statistical 
purposes."^  Finally,  an  investigation  made  by  the 
United  States  Bureau  of  Labor  into  the  wages  of 
twenty-five  occupations  in  a  few  of  the  leading  cities 
of  the  country,  showed  an  increase  for  this  decade  of 
eight  per  cent.^  After  due  allowance  has  been  made 
for  the  various  defects  in  the  three  sources  of  infor- 
mation considered  in  this  paragraph,  the  conclusion 
seems  valid  that  a  real  rise  in  general  wages  took 
place  between  1880  and  1890,  but  that  it  did  not 
amount  to  twelve,  nor,  in  all  probability,  to  eight  per 
cent.  The  Aldrich  Report  states  that  prices  fell  nine 
per  cent,  during  the  same  period. 

According  to  the  table  given  above,  the  number  of 
male  adults  receiving  less  than  $12.50  per  week  in 
thirty-four  manufacturing  industries  was  sixty-six 
per  cent,  in  1890  and  sixty-four  per  cent,  in  1900, — 
a  gain  of  two  per  cent,  for  the  decade  in  the  pro- 
portion of  those  getting  a  Living  Wage.  An  inves- 
tigation made  by  the  United  States  Bureau  of  Labor 
of  forty-two  manufacturing  and  mechanical  in- 
dustries shows  that  weekly  wages  increased  eleven 
per  cent,  and  the  cost  of  food  nine  per  cent,  between 
1890  and  1904.  ^     The  net  gain  to  labor  between 

*  Quarterly  Publications  of  the  American  Statistical  Asso- 
ciation, March,  1899. 

=■  Bulletin  No.  18,  p.  668. 
'Bulletin  No.  59,  p.  18. 

164 


UNDERPAID    LABORERS 

1890  and  any  year  in  the  present  century  seems, 
therefore,  to  have  been  inconsiderable. 

The  incomplete  and  in  some  respects  unreliable 
statistics  at  hand  indicate,  therefore,  that  the  im- 
mense improvements  in  production  that  have  been 
brought  about  within  the  last  quarter  of  a  century, 
have  not  been  followed  by  a  corresponding  improve- 
ment in  the  condition  of  the  laborer.  His  wages  have 
risen,  indeed,  during  this  period,  but  neither  so  stead- 
ily nor  to  such  an  extent  as  might  with  reason  have 
been  expected.  These  statements  refer  to  general 
wages.  Since  the  greatest  advances  in  remuneration 
have  occurred  among  the  organized — who  are  also 
the  better  paid — workmen,  there  is  some  reason  to 
think  that  the  wages  of  the  poorest  paid  have  not 
kept  pace  with  the  general  increase.  ^ 

Now  those  features  in  the  evolution  of  the  pro- 
cesses of  production  which  seem  to  have  restricted 
the  upward  trend  of  wages  in  the  recent  past,  will 
in  all  probability  show  the  same  tendency  for  a  long 
time  to  come.  The  first  of  them  is  the  prevalence 
of  monopoly.  In  his  Minority  Report  as  member 
of  the  Industrial  Commission,  Mr.  Phillips  estimates 
the  value  of  the  industries  of  the  country  that  are 
more  or  less  monopolistic  in  character  at  $17,000,- 
000,000,  "or  probably  one-fifth  of  what  the  present 
census  will  find  to  be  the  estimated  true  value  of  all 
property  in  this  country."  ^  As  a  matter  of  fact, 
the  great  combinations  formed  in  recent  years  have 
paid  at  least  as  high  wages  as  their  independent 

^  Cf.  the  table  of  the  relative  wages  prevailing  in  various 
occupations  found  in  the  Aldrich  Report,  p.  iii,  sq. 
*  Final  Report,  p.  684. 

I6S 


A    LIVING    WAGE 

rivals.  *  This,  however,  is  but  one  phase,  and  very 
probably  a  temporary  one,  of  the  situation.  Be- 
cause of  their  more  economical  organization,  the  so- 
called  trusts  can  turn  out  a  given  amount  of  product 
with  a  much  smaller  labor  force  than  is  required  in 
a  regime  of  competition.  Unless  they  make  their 
output  larger  than  it  would  have  been  under  the  old 
system,  they  will  consequently  be  able  to  reduce  the 
number  of  their  employees.  They  cannot  profit- 
ably increase  the  output  without  reducing  prices  to 
the  consumer,  and  this,  as  experience  shows,  they 
will  not  do.  Their  usual  practice  runs  in  the  oppo- 
site direction.  The  result  is  that  men  are  thrown 
out  of  employment,  to  enter  into  competition  with 
their  fellows  both  within  and  without  the  combina- 
tions, and  thus  bring  down  the  wages  of  all.  On 
the  other  hand,  the  increased  cost  of  living  which 
follows  a  monopolistic  organization  of  industry 
affects  the  laborer  precisely  as  it  affects  other  con- 
sumers. 

The  second  disquieting  fact  among  the  present 
tendencies  of  the  productive  process  is  the  displace- 
ment of  men  by  machines,  ^     Professor  Smart  gives 

*  Cf.  Final  Report  of  the  Industrial  Commission,  p.  625  ; 
and  Clark's  "Problem  of  Monopoly,"  p.  69. 

^  Referring  to  the  last  decade  of  the  Nineteenth  century, 
the  Twelfth  Census  tells  us :  "A  factor  that  has  had  a  real 
tendency  to  lower  the  actual  average  earnings  of  the  wage- 
earner  in  many  of  the  industries  is  the  displacement  of  the 
skilled  operative  by  machinery,  which  permits  the  substitution 
of  a  comparatively  unskilled  machine  hand.  This  tendency  is 
noticeable  in  many  lines  of  industry.  Its  effects  are  twofold  ; 
to  reduce  the  number  of  employees  producing  the  same  or  an 
increased  quantity  of  product ;  and  to  reduce  the  average  rate 
of  wages  because  of  the  lower  degree  of  skill  required." 
"Manufactures,"  Pt.  I,  p.  123. 

166 


UNDERPAID    LABORERS 

it  as  his  opinion  that  we  are  only  at  the  beginning  of 
the  machine  age,  and  that  the  need  for  man  is  for  the 
moment  becoming  less  and  less  in  all  fields  where 
machinery  is  entering.^  If  the  need  for  man  grows 
less,  will  not  the  proportion  of  unemployed  grow 
greater?  One  obvious  answer  to  this  question  is  a 
reference  to  the  experience  of  the  past.  Up  to  the 
present  the  substitution  of  machinery  for  hand  proc- 
esses does  not  seem  to  have  caused  any  permanent 
increase  in  the  proportion  of  unemployment.  The 
number  of  idle  men  is  probably  no  greater,  relatively 
to  the  whole  working  population,  than  it  was  before 
the  coming  of  the  machine  regime.  And  yet,  it  must 
be  borne  in  mind  that  this  result  is  a  mere  accident, 
for  there  is  no  necessary  connection  between  the  in- 
troduction or  extension  of  machine  production  and 
the  continuity  of  employment.  -  On  the  contrary 
there  is  reason  to  fear  that  a  more  or  less  direct  ratio 
exists  between  the  increase  in  the  rate  of  machine 
substitution,  and  the  increase  in  the  rate  of  unem- 
ployment. Assuming  that  the  former  will  be  quite 
marked  for  some  time  to  come,  we  must,  it  would 
seem,  expect  the  percentage  of  the  unwillingly  idle 
to  increase  likewise.  Every  time  a  new  labor-sav- 
ing machine  is  introduced  some  men  are  thrown  out 
of  work;  consequently,  the  greater  the  amount  of 
such  machinery  that  is  put  into  operation  in  a  given 
year,  the  greater  is  the  number  of  men  that  are  un- 
employed during  some  part  of  that  year.  Ultimate- 
ly they  may  ail  be  absorbed  in  the  old  industry  or  in 

*Cf.  "Distribution  of  Income,"  p.  235,  note. 
'Cf.  Hobson,  "Evolution  of  Modern  Capitalism,"  ch.  VIII. 
167 


A    LIVING    WAGE 

related  occupations,  but  there  is  at  least  an  increase 
in  the  number  of  those  who  are  temporarily  unem- 
ployed ;  and  the  more  rapidly  their  number  is  aug- 
mented, the  larger  will  be  the  sum  total  of  unemploy- 
ment, for  the  process  of  readjustment  will  not  keep 
pace  with  the  acceleration  of  machine  substitution. 
Thus,  if  the  new  forms  of  machinery  brought  into 
use  in  a  community  this  year  supplant  one  thousand 
men,  whereas  those  introduced  last  year  displaced 
only  five  hundred,  it  is  more  than  probable  that  the 
amount  of  unemployment  will  be  greater  this  year 
than  last.  Each  of  the  one  thousand  men  will  be 
out  of  work  for  more  than  half  the  number  of  days 
during  which  each  of  the  five  hundred  was  idle. 
Any  increase  in  the  rate  at  which  men  are  displaced 
by  machines,  therefore,  increases  unemployment, 
and  thus  tends  to  lower  wages. 

In  addition  to  the  rapid  introduction  of  new  forms 
of  capital,  the  unnecessary  multiplication  of  existing 
forms  seems  liable  to  impede  the  upward  movement 
of  wages  by  augmenting  unemployment.  We  save 
too  much  and  consume  too  little.  Too  much  of  the 
annual  product  of  the  nation  is  converted  into  ma- 
chinery. *'In  a  given  state  of  the  arts  and  with 
given  habits  of  consumption,  a  certain  amount  of 
machinery  can  be  advantageously  utilized ;  a  larger 
amount  than  this  is  waste.  We  have  for  generations 
been  cultivating  notions  which  should  make  individ- 
uals reduce  their  consumption  and  increase  their  in- 
vestment until  we  could  obtain  the  required  amount ; 
and  we  have   apparently   overdone  the   matter."  * 

^  Hadley,  "Economics,"  sec.  i6i. 
l68 


UNDERPAID    LABORERS 

The  influence  of  over-accumulation  of  capital  upon 
employment  is  so  well  described  by  Mr.  Hobson 
that  his  words  are  worth  quoting  at  some  length : 

"In  order  to  test  the  case,  take  a  community  with 
stable  population  where  there  has  existed  a  right 
economic  relation  between  forms  of  capital  and  rate 
of  consumption.  Suppose  an  attempt  is  initiated  to 
increase  savings  by  abstention  from  consumption  of 

some  class  of  goods,  say  cotton Since  no  trade 

requires  increase  of  capital,  the  new  savings  may 
as  well  be  invested  in  the  form  of  new  cotton  mills 
as  in  any  other  way.  Let  us  suppose  that  the  over- 
saving of  the  first  year  is  capitalized  in  this  form. 
What  has  occurred  during  this  first  year  is  that  an 
increased  employment  of  capital  and  labor  in  mak- 
ing cotton  mills  has  balanced  a  diminished  employ- 
ment in  making  cotton  goods.  Assuming  an  abso- 
lute fluidity  of  capital  and  labor,  the  net  employment 
for  the  community  is  not  affected  by  the  change.  Peo- 
ple have  simply  been  paid  to  make  cotton  mills  in- 
stead of  to  make  cotton  goods.  At  the  end  of  the  year 
there  exists  an  excess  of  cotton  mills  over  what 
would  have  been  required  if  consumption  of  cotton 
goods  had  stood  firm,  a  double  excess  over  what  is 
needed  to  supply  the  now  reduced  demand  for  cotton 
goods.  If  it  seems  unfair  to  any  one  that  I  should 
apply  the  over-saving  to  the  only  trade  where  the 
demand  is  absolutely  reduced,  I  can  only  reply  that 
it  simplifies  the  argument  and  makes  no  real  differ- 
ence in  its  validity.  If  we  assume  the  saving  to  be 
equally  distributed  among  all  trades,  then  at  the  end 
of  the  year  all  trades  would  be  to  a  minor  degree  in 
169 


A    LIVING    WAGE 

the  same  condition  as  the  cotton  trade  is  according 
to  my  illustration. 

"If  savers  were  mad  enough  to  continue  this 
policy,  preferring  the  growing  ownership  of  useless 
cotton  mills  to  the  satisfaction  of  consuming  com- 
modities, the  process  might  continue  indefinitely, 
without  reducing  or  afifecting  in  any  way  the  aggre- 
gate employment  of  labor  and  capital.  It  would 
simply  mean  that  a  number  of  persons  take  their 
satisfaction  in  seeing  new  cotton  mills  rising  and 
going  to  decay. 

"But  it  is  conceivable  that  in  the  second  year  of 
over-saving,  the  savers  instead  of  continuing  to  pay 
people  to  put  up  more  mills  might  employ  people  to 
operate  the  excess  of  cotton  mills,  lending  their 
money  to  buy  raw  material  and  to  pay  wages.  Cot- 
ton goods  which  ex  hypothesi  can  find  no  markets 
are  thus  accumulated.  If  the  savers  choose  to  take 
their  pleasure  in  such  a  way,  they  might  go  on  in- 
definitely without  the  aggregate  of  employment  of 
capital  or  labor  being  affected.  If  they  continue 
this  impolicy  for  a  twelvemonth,  we  should  say  that 
whereas  in  the  first  year  they  saved  useless  mills,  in 
the  second  they  saved  useless  cotton  goods.  In 
neither  the  first  nor  the  second  year  is  there  any  net 
increase  or  decrease  of  employment  due  to  the  new 
policy  of  saving.  In  fact,  assuming  sanity  of  in- 
dividual conduct,  affairs  would  work  out  differently. 
Admitting  an  attempt  to  work  the  surplus  mills,  the 
actual  over-production  of  goods  could  not  proceed 
far.  Let  us  assume  savers  to  use,  throughout,  the 
agency  of  banks,  which  are  to  find  investment  for 

170 


UNDERPAID    LABORERS 

their  savings.  Suppose  the  banks,  not  realizing  the 
mode  of  this  new  saving,  have  invested  the  first 
year's  savings  in  superfluous  cotton  mills.  These 
cotton  mills  or  others  in  the  next  year  cannot  con- 
tinue to  work  without  advances  from  banks,  since 
they  are  unable  to  effect  profitable  sales.  Soon 
after  the  beginning  of  the  second  year  the  banks  re- 
fuse to  make  further  efforts  for  over-production: 
markets  being  congested  and  prices  falling,  the  de- 
mand for  bank  accommodation  will  grow,  but  banks 
will  not  be  justified  in  making  advances.  Now  the 
weaker  mills  must  stop  work,  general  short  time 
follows,  and  the  result  is  unemployment  of  labor 
and  forms  of  capital.  This  is  the  first  attempt  to 
over-save  upon  employment.  We  have  now  for  the 
first  time  a  reduction  of  the  aggregate  of  production. 
The  result  of  reduced  employment  (under-produc- 
tion) will  be  a  reduction  of  real  incomes.  This 
will  tend  to  proceed  until  the  reduced  reward  of 
saving  (real  interest)  gradually  restores  the  right 
proportion  of  saving  to  spending — a  very  slow  and 
wasteful  cure. 

"It  thus  appears  that  so  long  as  saving  can  be 
vested  in  new  forms  of  capital,  whether  these  are 
socially  useful  or  not,  no  net  reduction  of  employ- 
ment is  caused,  the  portion  of  income  which  is  saved 
employs  as  much  labor  as,  though  not  more  than, 
that  which  is  spent,  but  when  the  machinery  of  pro- 
duction is  so  glutted  that  attempted  saving  takes 
shape  in  the  massing  of  loanable  capital  unable  to  find 
investment,  the  net  production  and  the  net  employ- 
ment of  labor  in  the  community  is  smaller  than  it 

171 


'A    LIVING    WAGE 

would  have  been  had  saving  been  confined  to  the 
minimum  required  by  the  needs  of  the  society. 

"From  the  standpoint  of  employment  the  injury 
done  by  over-saving  is  thus  seen  to  consist  not  in  the 
over-production  of  plant  or  goods  but  in  the  condi- 
tion of  under-production  which  follows  the  financial 
recognition  of  this  glut.  The  real  waste  of  power 
of  capital  and  labor  is  measured  by  the  period  and 
the  intensity  of  the  under-production  in  which  forms 
of  capital  and  labor  stand  idle."  ^ 

Over-production  induced  by  over-saving  is,  of 
course,  most  widespread,  as  it  is  most  striking,  dur- 
ing an  industrial  crisis.  But  it  may  exist  to  a  more 
limited  extent  during  periods  that  are  regarded  as 
substantially  normal.  There  may  be  an  excess  of 
productive  instruments  in  the  greater  number,  or 
even  in  all,  of  the  industries  of  a  country  at  all  times 
except  those  of  extraordinary  prosperity.  Some- 
thing very  like  this  seems  to  have  become  true  of  the 
United  States.  Between  1886  and  1896  the  average 
product  of  more  than  two  thousand  manufacturing 
establishments  in  Massachusetts  was  only  fifty  to 
seventy  per  cent,  of  their  full  capacity.^  It  has  been 
estimated  that  with  their  existing  equipment  of  cap- 
ital and  labor,  the  shoe  factories  of  the  country  could 
meet  the  current  annual  consumption  by  running 

*  "The  Problem  of  the  Unemployed,"  pp.  94-97.  See  also, 
"The  Evolution  of  Modern  Capitalism,"  ch.  VII,  by  the  same 
author.  Professor  Smart  observes  that  this  theory  has  not 
met  with  the  attention  that  it  deserves.  Anyone  who  will 
carefully  examine  it  cannot  fail  to  be  impressed  with  its  super- 
ior value  as  an  explanation  of  the  phenomena  that  constitute 
an  industrial  depression. 

*  Eleventh  Report  of  the  Annual  Statistics  of  Manufactures, 
pp.  99-104,  169. 

172 


UNDERPAID    LABORERS 

steadily  for  four  months.  ^  In  the  absence  of  larger 
statistics,  no  precise  estimate  of  the  extent  of  the 
phenomenon  can  be  attempted,  but  if  everyday  ob- 
servation may  be  relied  upon  the  amount  of  produc- 
tive power  that  is  unused  is  enormous.  At  every 
turn  we  seem  to  see  efficient  machinery  abandoned  or 
running  on  short  time.  And  the  cause  is  almost 
never  a  scarcity  of  labor.  Now  if  the  idle  or  par- 
tially idle  capital-instruments  were  the  worst  of  their 
kind,  and  if  the  new  machinery  invariably  and  im- 
mediately crowded  out  all  the  poorer  instruments 
that  were  not  needed  to  supply  the  current  rate  of 
consumption,  the  excessive  accumulation  of  capital 
would  cause  neither  over-production  nor  diminution 
of  employment.  The  savings  that  might  have  been 
exchanged  for  consumption  goods  would  have  been 
expended  in  making  machines  that  were  allowed 
to  perish  as  fast  as  newe^  machines  adequate  to  the 
current  demand  were  put  in  operation.  Thus  labor 
would  be  kept  employed  and  excessive  production 
restricted.  But  the  industrial  mechanism  does  not 
work  so  smoothly.  The  owners  of  the  older  instru- 
ments of  production  are  not  doing  business  on  this 
lofty  plane  of  philanthropy.  They  continue  to  pro- 
duce, and  to  compete  for  a  share  in  a  market  that  is 
beginning  to  be  over-supplied.  The  directors  of 
production  see  prices,  and  therefore  profits,  declining, 
and  endeavor  to  recoup  by  lowering  wages.  Profits, 
however,  continue  to  diminish  until  some  of  the  in- 
dustries are  closed,  others  are  running  only  a  part 

*  Final  Report  of  Industrial  Commission,  p.  752. 
173 


A    LIVING    WAGE 

of  the  time,  unemployment  has  increased,  and  wages 
are  further  reduced. 

This  theory  is  at  variance,  obviously,  with  one  of 
the  common-places  of  the  older  political  economy. 
We  have  been  assured  very  frequently  that  general 
over-production  is  an  absurdity,  since  a  supply  of 
goods  always  means  a  demand  for  goods,  and  since 
the  wants  of  men  are  never  fully  satisfied.  Undoubt- 
edly the  existence  of  goods  implies  the  power  to  pur- 
chase other  goods,  and  the  existence  of  unsatisfied 
wants  means  a  desire  to  purchase ;  but  what  Adam 
Smith  called  "effective  demand,"  the  only  kind  of 
demand  that  will  take  the  surplus  goods  off  the 
market,  requires  that  the  purchasing  power  and  the 
desire  exist  in  the  same  persons.  As  things  are, 
those  who  can  consume  more  have  not  the  desire, 
and  those  who  have  the  desire  have  not  the  power. 
And  there  is  assuredly  nothing  in  the  nature  of  our 
industrial  mechanism  to  prevent  this  condition,  which 
is  obviously  possible  in  one  or  two  lines  of  produc- 
tion, from  being  realized  in  all.  This  failure  of  pro- 
duction and  consumption  to  function  harmoniously 
in  the  economic  organism  seems  to  have  escaped  the 
notice  of  so  able  a  writer  as  Professor  Clark,  when 
he  wrote:  "The  richer  the  world  is  in  capital,  the 
richer  the  worker  is  in  productive  power."  ^  Richer 
in  productive  pozvcr,  yes ;  but  what  if  the  condition 
of  consumption,  the  actual  demand  for  products 
does  not  call  for  the  full  exercise  of  this  power  ?  The 
very  excess  of  productive  power  relatively  to  the 
needs  that  are  combined  with  purchasing  power, 

*"The  Distribution  of  Wealth,"  p.  172,  note. 
174 


UNDERPAID    LABORERS 

means  an  excess  of  supply  of  labor,  which  in  turn 
means  unemployment  and  low  wages. 

The  three  forces  of  combination,  rapid  introduc- 
tion of  new  forms  of  machinery,  and  excessive  mul- 
tiplication of  existing  forms,  seem  likely  to  continue 
operative  for  a  long  time  to  come.  In  a  general 
way  they  are  mutually  helpful  in  their  detrimental 
effects  on  labor.  The  powerful  and  highly  organ- 
ized industrial  combinations  are  able  to  put  in  new 
forms  of  machinery  on  a  more  extended  scale  than 
would  be  possible  in  a  regime  of  small  industries. 
It  is  true  that  these  combinations  will  check  ovei  - 
supply  of  capital  in  the  fields  in  which  they  are 
supreme,  but  in  so  doing  they  limit  the  opportunities 
of  new  capital.  Outside  of  the  province  dominated 
by  the  great  industries,  therefore,  the  danger  of  a 
too  abundant  supply  of  capital  instruments  is  in- 
creased ;  it  has  gained  in  intension  what  it  has  lost  in 
extension. 

To  sum  up,  sufficient  data  have  been  presented  to 
justify  the  conclusion  that  the  proportion  of  adult 
male  wage  earners  (outside  of  agriculture,  where 
the  remuneration  is  much  lower  but  the  cost  of  living 
not  so  high)  obtaining  less  than  $600  per  year, 
is  at  least  sixty  per  cent.  A  partial  confirmation 
of  this  estimate  is  seen  in  Mr.  Robert  Hunter's  cal- 
culation that,  "not  less  than  10,000,000  persons  in  the 
United  States  are  in  poverty" ;  that  is,  "they  may  be 
able  to  get  a  bare  sustenance,  but  they  are  not  able 
to  obtain  those  necessities  which  will  permit  them 
to  maintain  a  state  of  physical  efficiency."  ^     Ex- 

"Poverty,"  pp.  60  and  5. 

17s 


A    LIVING    WAGE 

plaining  "physical  efficiency,"  he  says :  "No  one  will 
fail  to  realize  how  low  such  a  standard  is.  It  does 
not  necessarily  include  any  of  the  intellectual, 
aesthetic,  or  social  necessities ;  it  is  a  purely  physical 
standard,  dividing  those  who  are  in  poverty  from 
those  who  may  be  said  to  be  out  of  it."  ^  Allowing 
one  male  adult  to  every  five  persons,  we  see  that 
Mr.  Hunter's  estimate  is  equivalent  to  the  statement 
that  two  million  men  in  the  United  States  do  not  get 
a  wage  sufficient  to  supply  their  normal  physical 
wants.  They  are  on  a  physical  level  below  that  of  a 
well  kept  horse  or  cow.  This  condition  alone  makes 
il  altogether  probable  that  sixty  per  cent,  of  the  adult 
male  wage  earners  among  the  13,113,590  males 
above  sixteen  years  engaged  in  gainful  occupations 
other  than  agricultural  and  professional,  receive  less 
than  $600  annually.  As  to  the  prospects  of  the 
underpaid,  wages  have  increased  less  rapidly  dur- 
ing the  last  quarter  of  a  century — the  period  of 
our  greatest  industrial  improvements — than  during 
the  previous  thirty  years.  Whence  the  inference 
seems  valid,  that  side  by  side  with  the  progress  of 
production  there  have  existed  forces  which  have 
prevented  the  laborer  from  obtaining  his  full  share 
of  the  results  of  that  progress.  Three  of  these  forc- 
es, namely,  monopolistic  combinations,  rapid  dis- 
placement of  labor  by  machinery,  and  excessive 
multiplication  of  the  instruments  of  production,  will 
in  all  probability  be  with  us  for  many  years  yet,  in- 
creasing the  rate  of  unemployment  and  restricting 
the  upward  movement  of  wages.     From  these  evils 

^  Idem,  p.  7. 

176 


UNDERPAID    LABORERS 

the  poorest  paid,  being  the  least  able  either  to  resist 
a  reduction  or  to  utilize  the  possibilities  of  a  rise  in 
their  remuneration,  will  naturally  be  the  greatest 
sufferers. 


u  177 


CHAPTER  IX 


Our  Industrial  Resources  and  a  Living  Wage 
For  All 

The  national  income  may  be  regarded  as  a  sum  of  prod- 
ucts or  as  the  total  of  personal  incomes.  In  the  first  sense 
it  cannot  be  satisfactorily  estimated.  From  an  estimate 
in  the  second  sense  no  definite  conclusion  can  be  drawn 
concerning  the  amount  of  income  per  family  that  would 
result  from  an  equal  distribution.  The  consequences  of  a 
better  utilization  of  the  nation's  industrial  resources:  (a) 
an  immense  increase  in  the  national  product  on  account 
of  the  increased  productivity  of  those  who  are  now  under- 
paid: (b)  a  very  considerable  increase  from  the  abolition 
of  luxury;  (c)  a  sufficient  increase  to  make  possible  a 
decent  livelihood  for  all  from  the  employment  of  idle 
labor  and  capital. 

The  fact  that  so  large  a  proportion  of  the  laborers 
of  America  fail  to  get  a  Living  Wage  naturally 
raises  the  question,  whether  this  condition  is  not  in 
some  measure  due  to  the  insufficiency  of  our  resourc 
es  of  production?  If  the  facts  call  for  an  affirmative 
answer  it  cannot  be  maintained  that  all  the  laborers 
of  America  have  a  present,  actual  right  to  a  Living 
Wage.  There  are  no  rights  to  conditions  or  actions 
that  are  impossible  of  realization.  Let  us  first 
examine  whether  the  present  national  income  would 
afford  a  universal  Living-  Wage  if  it  were  equally 
178 


OUR    INDUSTRIAL    RESOURCES 

distributed,  and  then  whether  our  productive  capaci- 
ties, actual  and  possible,  are  adequate  to  this  end. 

The  national  income,  that  is,  the  aggregate  of  util- 
ities put  at  the  disposal  of  the  inhabitants  of  the 
nation  in  the  course  of  the  year,  may  be  conceived 
of  and  described  in  two  ways :  either  as  the  total 
amount  of  goods  and  services  made  available,  or  as 
the  sum  of  all  the  incomes  received  by  the  owners 
of  the  instruments  of  production,  the  makers  of 
the  products,  and  the  performers  of  personal  ser- 
vices. In  the  first  sense,  the  national  income 
comprises  the  sum  total  of  food,  clothing,  hous- 
ing, fuel,  lighting,  and  material  goods  generally, 
and  all  immaterial  services,  such  as,  the  advice 
given  by  the  lawyer,  the  instruction  furnished 
by  the  teacher  and  the  clergyman,  the  entertainment 
afforded  by  the  actor,  the  tasks  performed  by  the 
domestic  servant,  etc., — that  are  annually  produced 
and  made  available  for  the  satisfaction  of  human 
wants.  Now  if  we  could  estimate  this  total  of  goods 
and  services  in  some  comprehensive  way  and  express 
it  by  some  common  term,  we  should  be  in  a  position 
to  answer  the  first  of  the  questions  proposed  above. 
As  this  condition  is  obviously  impossible,  owing  to 
lack  of  statistical  data  and  the  inherent  difficulties  of 
the  problem,  we  turn  to  the  second  measure  of  the 
national  income.  We  ask,  how  much  money  have 
the  capitalists,  landowners,  laborers,  entrepreneurs, 
professional  men,  domestic  servants,  and  the  rest,  re- 
ceived during  the  year  for  the  part  that  they  have  tak- 
en in  producing  or  rendering  available  all  these  goods 
and  services  ?  Instead  of  measuring  the  latter  direct- 

179 


A    LIVING    WAGE 

ly,  we  get  an  indirect  measure  in  the  money  that  has 
been  paid  for  producing  them.  Nor  is  the  sum  of 
individual  incomes  an  excessive  measure  of  the  na- 
tional product.  It  is,  indeed,  greater  than  the  value 
of  the  material  product,  inasmuch  as  the  sums  re- 
ceived for  making  the  latter  are  frequently  duplicated 
and  sometimes  tripled  in  the  income  calculation. 
A  part  of  the  net  profit  obtained  by  the  manufac- 
turer, for  example,  is  paid  out  to  domestic  servants, 
and  thus  figures  twice  in  the  summary  of  personal 
incomes.  It  must  be  kept  in  mind,  however,  that  the 
national  product,  national  income,  the  annual  sum 
of  utilities  put  at  the  nation's  disposal,  consists  not 
merely  of  material  goods,  but  of  material  goods  plus 
immaterial  personal  services.  The  services  rendered 
by  the  physician,  the  barber,  the  coachman,  or  the 
cook,  are  as  truly  utilities,  are  as  much  a  part  of  the 
good  things  that  are  annually  made  available  for  the 
use  and  comfort  of  the  people,  as  are  wheat,  iron  or 
cotton.  They  must  consequently  find  a  place  in  any 
calculation  of  the  nation's  total  income  or  product. 

What  is  the  present  national  income  of  terms  of 
personal  incomes?  Anything  like  a  definite  answer 
is  impossible,  but  Dr.  Spahr's  estimate  will  furnish 
a  basis  for  a  rough  guess,  and,  moreover,  will  serve 
to  show  the  unimportance  of  the  question  as  far  as 
concerns  the  purpose  of  this  chapter.  According 
to  his  computation,  the  total  amount  obtained  by  all 
classes  of  income-receivers  in  1890  was  $10,800,000,- 
000.^  This  divided  equally  among  the  12,500,000 
families  then  in  the  country  (reckoning  five  persons 

^"Present  Distribution  of  Wealth  in  the  United  States," 
pp.  104,  105. 

180 


OUR    INDUSTRIAL    RESOURCES 

to  a  family)  would  have  provided  each  with  an 
annual  income  of  $864, — a  very  liberal  Living 
Wage.  Unfortunately,  however,  the  problem  is  not 
one  of  simple  division ;  for  the  national  income  does 
not  exist  as  a  lump  sum,  and  is  not  distributed  all  at 
once.  It  is  divided  among  the  producers  according 
as  it  is  produced,  and  this  method  of  distribution 
determines  the  direction  of  the  productive  forces 
and  the  amount  of  the  product.  ^  An  equal  division 
of  the  national  income  among  all  the  income  receiv- 
ers in  1890  would  necessarily  have  been  made  with- 
in a  few  days,  or  at  most  a  few  weeks,  of  the  time 
when  the  goods  and  services  were  produced.  As  a 
consequence,  the  demand  for  products  would  have 
been  other  than  it  actually  was  during  that  year. 
Since  workers  of  every  description  would  have  been 
in  receipt  of  comfortable  but  not  large  incomes,  the 
demand  for  luxuries  would  have  been  considerably 
less,  and  the  demand  for  necessaries  and  comforts 
immensely  greater.  Hence  the  amount  and  kind  of 
products  brought  into  existence  in  response  to  this 
different  demand  would  have  been  other  than  they 
really  were,  and  there  is  a  probability  equivalent  to 
a  certainty  that  the  sum  total  of  incomes  received  by 
the  contributors  to  these  products  would  have  been 
either  more  or  less  than  $io,8oo,cxx),ooo.  The  in- 
come per  family  would,  therefore,  have  been  repre- 
sented by  some  other  figure  than  $864.  Moreover, 
this  sum  would  in  all  probability  not  have  had  the 

*  Cf.  Seager's  review  of  Smart's  "Distribution  of  Income" 
in  the  "Annals  of  the  American  Academy  of  Political  and 
Social  Science,"  vol.  xvi,  p.   140. 

181 


A    LIVING    WAGE 

same  purchasing  power  that  it  had  in  the  system  of 
distribution  that  actually  existed  in  1890. 

The  difficulties  called  up  by  this  partial  statement 
of  the  problem  render  any  attempt  to  estimate  the  in- 
come that  men  would  receive  from  an  absolutely 
equal  distribution,  a  waste  of  time.  Let  us,  there- 
fore, abandon  this  line  of  inquiry,  and  ask  ourselves 
whether  the  natural  resources  and  productive  forces 
of  the  country  would,  if  fully  utilized,  provide  all 
laborers  and  their  families  with  the  requisites  of  a 
decent  livelihood.  What,  in  the  first  place  would 
be  the  probable  effect  of  a  Living  Wage  on  the  pro- 
ductive efficiency  of  those  workers  who  are  at  pres- 
ent receiving  less  than  that  rate? 

According  to  the  theory  of  "the  economy  of  high 
wages," — at  least,  when  stated  in  its  extreme  form — • 
every  increase  in  the  laborer's  remuneration  will  be 
followed  by  a  relatively  larger  increase  in  his  pro- 
duct. The  higher  his  wage,  the  more  profitable  will 
he  be  to  his  employer.  If  these  assumptions  were 
valid  the  possibility  of  a  universal  Living  Wage 
would  be  abundantly  proved,  and  the  only  practical 
task  remaining  would  be  to  convince  employers  that 
the  theory  was  sound. 

The  evidence  of  Sir  Thomas  Brassey,  founded 
mainly  upon  his  own  and  his  father's  experience  as 
railway  builders  in  every  quarter  of  the  globe,  tended 
to  show  that  highly-paid  labor  is  the  cheapest  in 
occupations  requiring  great  muscular  exertion.  ^ 
Schulze-Gaevernitz,  -    Schoenhof  ^   and   Brentano  * 

^  "Work  and  Wages." 
"  "Der  Grossbetrieb." 
'  "The  Economy  of  High  Wages." 
•"Hours,  Wages,  and  Production." 
182 


OUR    INDUSTRIAL    RESOURCES 

maintain  that  the  same  principle  holds  g-ood  in  ma- 
chine industries.  ^  The  widest  and  most  searching 
of  the  investigations  upon  which  these  authors  base 
their  conclusions  was  that  made  by  Schulze-Gaever- 
nitz  in  the  field  of  cotton  manufacture.  He  found 
that  in  America,  where  wages  are  highest,  the  cost 
of  producing  a  yard  of  cotton  goods  was  lower  than 
in  any  other  country.  On  the  other  hand,  Mr.  Hob- 
son  is  of  the  opinion  that,  "while  a  rise  of  wages  is 
nearly  always  attended  by  a  rise  of  efficiency  of  labor 
and  of  the  product,  the  proportion  which  the  in- 
creased efficiency  will  bear  to  the  rise  of  wage  will 
differ  in  every  employment."  ^ 

The  theory  is  of  interest  here  only  in  so  far  as  it 
applies  to  those  laborers  who  are  at  present  under- 
paid. If  the  receipt  of  a  Living  Wage  by  them 
would  result  in  a  corresponding  increase  in  their 
productivity,  the  latter  would,  of  course,  be  suffi- 
cient to  provide  the  increased  remuneration.  Presi- 
dent Hadley  seems  to  hold  that  no  such  universal 
augmenting  of  productive  power  would  occur. 
Low-grade  labor,  he  says,  is  the  cheapest  in  some 
employments,  but  not  in  work  requiring  a  great 
amount  of  physical  strength.  ^  If  this  view  is  cor- 
rect a  large  proportion  of  the  underpaid,  namely^ 
those  engaged  in  exhausting  muscular  activity, 
would  prove  more  profitable  to  their  employers  if 
they  were  paid  a  Living  Wage ;  but  the  workers  in 
industries  that  involve  not  so  much  a  large  output 

^Cf.  Walker,  "The  Wages  Question,"  ch.  III. 

'"The  Evolution  of  Capitalism,"  p.  271.  Chapter  X  of  this 
work  gives  a  concise  presentation  and  a  critical  analysis  of  the 
theory  under  consideration. 

*  "Economics,"  sees.  361-363. 
183 


A    LIVING    WAGE 

of  physical  energy,  as  the  long-continued  and  mo- 
notonous exercise  of  a  few  muscles,  for  example, 
garment  workers  and  machine  tenders,  would  fail 
to  "make"  the  increased  compensation.  Professol 
Marshall  says  that  all  consumption  by  the  laborer 
within  the  limits  of  the  necessaries  for  efficiency  is 
"strictly  productive  consumption;  any  stinting  of 
this  consumption  is  not  economical,  but  wasteful."* 
And  his  estimate  of  the  necessaries  for  efficiency 
"comprises,  as  we  saw  in  the  last  chapter  but  one, 
a  decent  livelihood  for  the  laborer  and  his  family. 
In  view  of  the  complicated  nature  of  the  problem, 
however,  the  only  general  conclusion  that  seems 
justifiable  is  that  the  payment  of  a  Living  Wage  to 
the  underpaid  would  be  followed  by  an  immense 
increase  in  the  national  product.  ^ 

A  second  means  of  helping  to  make  possible  a 
Living  Wage  for  all  might  be  sought  in  the  aboli- 
tion of  expenditures  for  luxuries.  According  to 
Professor  Marshall,  "more  than  one-half  of  the  con- 
sumption of  the  upper  classes  of  society  in  England 
is  wholly  unnecessary."  ^  The  same  is  probably 
true  of  the  wealthier  classes  in  America.  If  the 
labor  and  capital  now  employed  in  producing  the 
superfluities  of  life  were  utilized  in  adding  to  the 
stock  of  necessaries  and  comforts,  the  supply  of  the 

*  "Principles  of  Economics,"  p.  123,  ist  ed, 

'  Sidney  and  Beatrice  Webb  are  firmly  convinced  that  a 
universal  Living  Wage  would  be  an  economic  and  social  gain 
to  Great  Britain,  and  they  seem  to  have  made  a  most  careful 
and  searching  analysis  of  the  whole  matter.  See  the  chapter 
on,  "The  Economic  Characteristics  of  Trade  Unionism," 
especially,  pp.  715-739,  in  the  first  edition  of  "Industrial 
Democracy." 

•  Op.  cit.,  p.  124. 

184 


OUR    INDUSTRIAL    RESOURCES 

latter  would  be  vastly  increased.  Professor 
Smart's  illustration  of  the  enormous  amount  of  the 
nation's  resources  that  may  be  diverted  to  the  pro- 
duction of  luxuries  which  will  satisfy  only  a  few  per- 
sons, is  so  clear  and  striking  that  it  is  worth  quoting 
in  full: 

"Indeed,  a  small  minority  of  the  world's  inhab- 
itants may  take  up  all  the  increase  in  wealth,  leav- 
ing the  majority  at  the  old  level,  or  sinking  them 
below  that  level.  Plant  a  field  with  potatoes,  and 
leave  enough  grass  to  pasture  a  cow,  and  the  field 
will  maintain  a  dozen  farmers  in  sound,  healthy  life. 
But  sow  the  field  down  in  the  finer  vegetables,  and 
plant  gooseberry  bushes  on  the  pasture,  and  the 
field  will  now  yield  vegetables  for  perhaps  half  a 
dozen.  Finally,  suppose  the  field  to  be  sown  down 
in  flowers,  not  only  does  it  not  support  anybody, 
but  it  cannot  support  enough  of  flowers  to  satisfy  a 
few  rich  people.  By  this  it  may  be  seen  that  a  cer- 
tain amount  of  labor  and  capital  may  be  devoted  to 
maintaining  an  entire  nation  in  plain  but  sound 
life.  Or  it  may  be  so  employed  as  to  yield  a  high 
level  of  comfort  to  a  good  many,  while  keeping  a 
majority  at  the  twenty-shilling-a-week  level.  Or 
it  may  be  laid  out  to  supply  the  intellectual,  spirit- 
ual, and  aesthetic  wants  of  a  few,  while  the  major- 
ity are  on  the  twenty-shilling  level,  and  a  minority 
is  at  the  starvation  level.  It  is  not  true  that  the 
well  being  of  society  as  a  whole  is  secured  by  the 
accumulation  of  wealth  and  capital.  The  great 
majority  may  be  very  little  the  richer  for  it."  ^ 

*  "Studies  in  Economics,"  pp.  323,  324. 
185 


A    LIVING    WAGE 

The  effect  of  transferring  productive  energies 
from  the  field  of  luxuries  to  that  of  necessaries  and 
comforts,  is  touched  upon  only  to  show  what  might 
1)6  expected  from  that  quarter  in  the  event  that  re- 
course to  it  were  necessary.  In  the  present  state 
of  our  industrial  resources  no  such  necessity  exists. 
The  material  requisites  of  a  decent  livelihood  for  all 
could  be  provided  without  curtailing  in  the  slightest 
the  present  production  of  superfluities.  The  prob- 
lem of  the  underpaid  is  not  a  problem  of  produc- 
tion at  all,  but  of  distribution.  Indeed,  so  long  as 
the  existing  extremes  of  distribution,  personal  in- 
comes, and  individual  purchasing  powers  obtain, 
it  is  better,  from  the  purely  economic  viewpoint, 
that  the  present  outlay  for  luxuries  should  be  con- 
tinued, yes,  increased,  than  that  it  should  be  con- 
verted into  capital,  and  intensify  the  evils  of  over- 
production and  unemployment.  This  phase  of  the 
problem  seems  to  escape  entirely  the  notice  of  those 
superficial  writers  who  condemn  luxury  chiefly  on 
the  ground  that  it  is  a  waste  of  wealth  that  might 
have  gone  to  swell  the  fund  of  productive  capital. 
It  is  true  that  lavish  expenditures  for  articles  whose 
cost  of  production  is  out  of  all  proportion  to  their 
real  utility,  and  which  minister  only  to  vanity  or 
still  lower  perversions  of  passion,  constitute  a  grave 
moral  and  social  evil ;  but  as  long  as  consumption 
lags  so  far  behind  production,  they  are  the  lesser  of 
two  economic  evils. 

The  third  and  chief  source  from  which  the  in- 
crease in  the  wages  of  the  underpaid  can  be  drawn, 
is  the  vast  amount  of  productive  power  that  is  at 

i86 


OUR    INDUSTRIAL    RESOURCES 

present  unutilized  or  only  partially  utilized.  The 
question  of  the  increased  productivity  of  the  under- 
paid themselves  has  already  been  discussed ;  refer- 
ence here  is  to  the  unemployed  workers  and  espec- 
ially to  the  material  factors  of  production.  No  one 
M^ho  is  at  all  acquainted  with  the  unused  industrial 
resources  of  America, — the  lands,  mines,  and  fish- 
eries, the  machinery  that  exists  and  that  could  read- 
ily be  called  into  existence,  the  numbers  of  men  that 
are  nearly  always  unemployed  in  nearly  every  in- 
dustry,— can  doubt  for  a  moment  that  if  all  these 
were  fully  utilized  in  addition  to  the  productive 
forces  actually  employed,  the  national  product  would 
be  abundantly  adequate  to  provide  a  decent  liveli- 
hood for  every  man,  woman,  and  child  in  the  coun- 
try. The  tendency  of  production  to  outrun  con- 
sumption, which  was  spoken  of  in  the  last  chapter, 
is  in  itself  almost  a  sufficient  proof  of  the  proposition 
for  which  we  are  contending.  One  of  the  most 
striking  indications  of  the  tendency  is  to  be  found 
in  the  recent  political  phenomenon  of  "Imperialism." 
America  has  been  drawn  into  a  tremendous  rivalry 
with  the  other  great  world  powers  for  the  possession 
of  "spheres  of  influence"  in  the  less  developed 
regions  of  the  earth.  Only  on  the  surface  and  in 
some  of  the  means  employed,  is  this  contest  politic- 
al ;  fundamentally  and  in  its  final  aim,  it  is  economic, 
commercial.  The  activities  of  international  politics 
are  to  a  large  and  increasing  extent  busy  with  the 
problem  of  finding  a  foreign  outlet  for  products  and 
capital  that  cannot  be  consumed  and  employed  at 
home.  * 

*Cf.  Reinsch,  "World  Politics,"  p.  31,  sq.     The  following 
187 


A    LIVING    WAGE 

The  possibilities  that  are  bound  up  with  an  in- 
crease in  the  productivity  of  the  underpaid,  the 
aboHtion  of  luxury,  and  the  full  utilization  of  idle 
productive  power  of  all  kinds,  prove  as  conclusively 
as  any  reasonable  mind  could  ask,  that  the  problem 
of  the  underpaid  is  wholly  one  of  distribution. 
What  Professor  Smart  says  of  England  may  be 
applied  with  emphasis  to  the  United  States:  "The 
abolition  of  poverty  is  now  within  our  reach  if  we, 
as  a  society,  are  really  bent  on  its  abolition.  The 
resources  of  the  nation  in  capital,  invention,  and 
labor  are  now  so  great  that  the  one  want  of  the 
time  is  organization,  so  that  there  shall  be  no  mis- 
direction of  production,  no  waste  in  consumption. 


sentences  taken  from  John  A.  Hobson's  "Imperialism,"  ch.  VI, 
suggest  what  seems  to  be  the  only  adequate  explanation  of 
the  attitude  of  America  toward  the  imperialistic  movement. 
They  were  written  in  1901.  "The  spirit  of  adventure,  the 
American  'mission  of  civilization,'  are,  as  forces  making  for 
Imperialism,  clearly  subordinate  to  the  driving  force  of  the 
economic  factor.  The  dramatic  character  of  the  change  is 
due  to  the  unprecedented  rapidity  of  the  industrial  revolution 
in  the  United  States  during  the  last  two  decades.  During  that 
period  the  United  States,  with  her  unrivalled  natural  resources, 
her  immense  resources  of  skilled  and  unskilled  labor,  and  her 
genius  for  invention  and  organization,  has  developed  the  best 
equipped    and    most    productive    manufacturing    economy    the 

world   has   yet   seen The   power   of   production   has    far 

outstripped  the  actual  rate  of  consumption It  is  suffi- 
cient to  point  out  that  the  manufacturing  power  of  a  country 
like  the  United  States  may  grow  so  fast  as  to  exceed  the  de- 
mands of  the  home  market.  No  one  acquainted  with  trade  will 
deny  a  fact  which  all  American  economists  assert,  that  this  is 
the  condition  which  the  United  States  has  reached  within  the 
last   few  years,  so  far  as  the  more  developed  industries  aie 

concerned It  is  this  sudden  demand  for  foreign  markets 

for  manufactures  and  for  investments  which  is  avowedly  re- 
sponsible for  the  adoption  of  Imperialism  as  a  political  policy 
and  practice  by  the  Republican  party  to  which  the  great  indus- 
trial and  financial  chiefs  belong,  and  which  belongs  to  them." 

188 


OUR    INDUSTRIAL    RESOURCES 

no  friction  from  the  currency."  ^  So  far  as  produc- 
tive resources  are  concerned,  modern  life  is  not,  as 
Malthus  supposes,  a  lottery  in  which  "some  unhappy 
persons  have  drawn  a  blank."  ^  There  remains, 
then,  the  problem  of  distribution.  The  discussion 
of  that  phase  of  the  problem  which  has  to  do  with 
the  obligations  of  the  different  economic  classes  to 
provide  the  laborer  with  a  Living  Wage,  will  be  the 
burden  of  the  remaining  chapters  of  this  volume. 

1  "Studies  in  Economics,"  p.  330. 

2  "Population,"  vol.  ii,  p.  34,  London,  1826. 


X89 


CHAPTER  X 


The  Forces  That  Regulate  Price 

The  obligation  of  providing  the  laborer  with  a  Living 
Wage  is  conditioned  by  the  forces  controlling  the  present 
distributive  system.  All  the  factors  of  production  are  paid 
for  out  of  the  price  of  the  product.  The  latter  is  deter- 
mined immediately  by  the  quantative  relations  between 
supply  and  demand,  remotely  by  natural  resources,  ex- 
penses of  production,  the  desires  of  the  buyers,  and  the 
purchasing  power  of  the  buyers.  Incorrectness  of  the 
Socialist  theory  of  value. 

The  obligation  correlative  to  the  right  to  a  Living 
Wage  falls  upon  "the  members  of  the  industrial 
community  in  which  the  laborer  lives."  After  the 
laborer  himself,  they  are  the  immediate  and  the 
principal  beneficiaries  of  his  exertion ;  and  they  are 
chiefly  responsible  for  his  success  or  failure  in  real- 
izing his  fundamental  right  of  access  on  reasonable 
terms  to  as  much  of  the  common  heritage  of  mate- 
rial things  as  will  enable  him  to  live  a  decent  life. 
Only  to  a  secondary  extent  are  the  members  of  oth- 
er industrial  communities  gainers  by  his  toil  or  de- 
termining factors  in  the  matter  of  his  industrial 
opportunities.  Besides,  they  are  burdened  with  re- 
sponsibilities of  their  own  toward  the  laborers  with 
whom  they  are  in  immediate  relations.  What,  then, 
190 


FORCES  THAT  REGULATE  PRICE 

is  the  concrete  meaning  of  the  phrase,  "the  members 
of  the  industrial  community  in  which  the  laborer 
lives"?  A  negative  answer  may  be  given  at  once: 
it  does  not  chiefly  refer  to  the  community  as  a  politic- 
al entity.  The  duty  of  paying  all  laborers  a  Living 
Wage  does  not  rest  primarily  on  the  State,  or  on 
any  provincial  or  municipal  subdivision  of  it.  The 
present  economic  system  is  not  an  institution  or  a 
department  of  the  State ;  it  is  shaped,  controlled  and 
maintained  by  individuals.  Upon  individuals  or 
classes  of  individuals,  therefore,  rests  immediately 
and  chiefly  the  responsibility  of  directing  the  system 
along  the  lines  of  justice.  In  order  to  know  the 
class  or  classes  of  individuals  that  are  charged  with 
the  obligation  in  question,  and  the  degree  in  which 
it  is  shared  by  each  class,  we  shall  find  it  profitable, 
necessary  in  fact,  to  make  a  brief  review  of  the 
present  distributive  process. 

The  national  product  is  divided  among  the  factors 
of  production  in  the  following  manner:  One  share 
goes  to  the  laborers,  or  wage  earners,  in  the  form 
of  wages ;  another,  to  the  organizer,  director,  under- 
taker, of  a  business,  in  other  words,  the  employer  of 
the  laborers,  and  is  known  as  profits ;  a  third  portion 
is  taken  by  the  owner  of  capital  as  interest ;  a  fourth 
share  is  paid  to  the  landowner  under  the  name  of 
economic  rent.  Other  classifications  of  the  factors 
of  production  and  their  rewards  are  preferred  by 
some  writers,  but  the  one  here  given  is  the  most 
common,  and  seems  to  be  the  most  convenient.  Two 
or  more  of  these  productive  functions  may  be  dis- 
charged by  the  same  person,  as,  in  the  case  of  the 
191 


A    LIVING    WAGE 

manufacturer  who  directs  the  operation  of  a  factory 
with  his  own  capital  on  his  own  land.  Such  a  per- 
son is  at  once  employer,  capitalist,  and  landlord, 
and  receives  the  three  appropriate  shares  of  the 
product.  Even  here  the  several  shares  can  be 
reckoned  separately. 

Now  the  product  of  an  industry,  or  of  all  the  in- 
dustries of  the  nation,  is  not  distributed  among  the 
various  productive  contributors  in  its  material  forn). 
The  men  who  furnish  the  labor,  and  directive  abil- 
ity, and  capital,  and  land  for  running  a  shoe  factory 
are  not  paid  for  their  services  in  shoes.  What  they 
receive  is  a  certain  proportion  of  the  price  for  which 
the  shoes  are  sold.  The  same  is  true  of  all  other 
industries,  extractive,  agricultural,  manufacturing, 
transport,  or  trade.  Hence  the  total  price,  or  value 
— for  price  is  only  the  concrete  money  form  of  social 
value — of  the  product  determines  the  total  amount 
that  will  be  distributed  among  the  owners  of  the 
various  factors  of  production. 

The  total  price  obtained  for  the  product  of  any 
industry  during  a  period  of  time  depends  upon  the 
selling  price  of  the  separate  units  of  product.  In 
other  words,  it  is  determined  by  the  market  price. 
And  the  market  price  depends  upon  the  conditions 
of  supply  and  demand.  No  doubt,  it  would  be  more 
scientific  to  say  that  the  market  price  is  fixed  by 
the  "subjective  valuation  of  the  two  Marginal 
Pairs,"  or,  by  "the  valuation  of  the  Least  Capable 
Buyer."  Since,  however,  we  have  the  assurance  of 
Boehm-Bawerk  himself  that,  "the  law  of  price  may 
be  correctly,  though  less  expressively  and  less  un- 

192 


FORCES  THAT  REGULATE  PRICE 

ambiguously,  formulated  in  terms  of  supply  and 
demand,"  our  present  aim  will  be  better  realized 
through  the  medium  of  the  older  and  simpler  phrase- 
ology. There  is  no  objection,  says  the  author  just 
mentioned,  "to  treating  the  theory  of  price  under  the 
good  old  catchwords.  Supply  and  Demand,  if  care 
is  only  taken  to  avoid  the  errors  and  misunderstand- 
ings which  so  plentifully  surround  them,  and  to  in- 
form the  old  forms  and  formulae  with  new  and 
clear  knowledge."  ^  To  guard  against  error  and 
misunderstanding,  therefore,  let  us  define  supply  as. 
the  amount  of  a  commodity  that  is  or  will  be  offered 
for  sale  at  a  given  price;  and  demand,  as  the  amount 
that  buyers  are  able  and  willing  to  take  at  a  given 
price. 

Market  price,  therefore,  is  always  determined  by 
the  quantative  relation  existing  between  supply  and 
demand,  that  is,  by  the  relation  which  the  amount 
offered  at  a  price  bears  to  the  amount  that  buyers 
are  willing  to  take  at  that  price.  In  any  market 
the  quantity  of  goods  to  be  had  will  vary  directly 
with  the  price  demanded ;  sellers  will  be  ready  to 
proffer  more  at  a  high  price  than  at  a  low  price.  On 
the  other  hand,  the  amount  that  will  be  demanded 
will  vary  inversely  with  the  price  offered;  buyers 

*  "Positive  Theory  of  Capital,"  pp.  214,  215.  For  a  tech- 
nical and  scientific  treatment  of  the  subject  of  value,  see : 
Smart's  "Introduction  to  the  Theory  of  Value" ;  Wieser's 
"Natural  Value"  ;  Boehm-Bawerk's  "Positive  Theory  of  Cap- 
ital," Books  III  and  IV ;  Macfarlane's  "Value  and  Distribu- 
tion," Part  I ;  Carver's  "Distribution  of  Wealth,"  ch.  I ;  and 
Hobson's  "Economics  of  Distribution,"  ch.  Ill,  which  contains 
a  brief  but  effective  criticism  of  the  excessive  emphasis  put 
upon  the  element  of  utility  by  the  writers  of  the  "Austrian 
School." 

13  193 


A    LIVING    WAGE 

will  take  more  at  a  low  price  than  at  a  high  price. 
Out  of  the  differences  that  exist  between  the  quan- 
tities offered  at  various  prices  on  the  one  side,  and 
the  quantities  asked  for  at  those  prices  on  the  other, 
the  actual  market  price  emerges  as  a  sort  of  result- 
ant. When  the  amount  offered  at  a  given  price  is 
great  relatively  to  the  amount  asked  for  at  that 
price,  the  resulting  market  price  will  be  lower  than 
when  the  amount  offered  at  any  price  is  small  rela- 
tively to  the  amount  desired  at  the  same  price.  The 
market  price  will  always  be  at  that  point  at  which 
the  quantity  offered  is  equal  to  the  amount  desired; 
or,  where  supply  and  demand  are  equal. 

While  the  statement  just  made  is  necessarily  in- 
definite and  not  entirely  satisfactory,  it  is  not  a 
mere  identical  proposition.  It  tells  us  by  implication 
that  different  amounts  are  offered  or  are  available 
at  different  prices,  that  different  amounts  are  de- 
sired at  different  prices,  and  that  the  market  price 
cannot  be  any  of  these  except  one  at  which  the 
amounts  offered  and  demanded  are  equal.  And  it 
is  quite  as  exprtssive  as  the  more  technical  formula 
that  market  price  will  be  at  or  about  the  valuation 
of  that  one  among  the  actual  buyers  whose  valua- 
tion is  lowest.  It  suggests,  moreover,  a  sufficient 
notion  of  the  causes  that  bring  about  changes  in 
price.  These  are  either  immediate  or  remote.  The 
immediate  cause  of  a  change  in  price  is  a  change  in 
the  quantative  relation  between  supply  and  demand. 
When  supply  decreases  relatively  to  demand  or  when 
demand  increases  relatively  to  supply,  prices  will 
rise;  when  supply  increases  relatively  to  demand  or 
194 


FORCES  THAT  REGULATE  PRICE 

when  demand  decreases  relatively  to  supply,  prices 
will  fall.  Thus  a  change  in  price  may  be  effected 
by  forces  acting  either  from  the  side  of  supply  or 
from  the  side  of  demand.  Supply  remaining  the 
same,  a  change  in  demand  will  produce  a  change  in 
price ;  demand  continuing  constant,  price  will  change 
through  a  change  in  supply. 

It  has  been  contended  that,  since  price  change  is 
a  process  rather  than  a  static  fact,  supply  and  de- 
mand should  not  be  considered  as  stationary 
amounts  but  as  flows.  The  movement  of  goods  in 
a  market  is  best  represented  as  a  continuous  inflow 
and  outflow,  and  the  operations  of  supply  and  de- 
mand as  varying  rate  of  such  movement.  "Where 
goods  flow  out  of  a  stock  at  the  same  pace  as  they 
flow  in,  the  price  remains  firm  and  demand  and  sup- 
ply will  be  said  to  be  equilibrated ;  where  the  inflow 
is  faster  than  the  outflow,  prices  fall  and  supply  will 
be  said  to  exceed  demand;  where  the  outflow  is 
faster  prices  rise,  and  demand  exceeds  supply.  ^ 

The  remote  causes  of  a  change  in  price  are:  on 
the  side  of  supply,  a  change  in  the  condition  of  nat- 
ural resources  or  in  the  expenses  of  production; 
on  the  side  of  demand,  a  change  in  the  desires  or 
in  the  purchasing  power  of  the  buyers.  In  the  mat- 
ter of  coal,  for  example,  the  exhaustion  of  certain 
fields,  or  a  rise  in  wages  or  profits,  will  cause  a  rise 
in  price,  while  changes  in  the  opposite  direction  will 
bring  about  a  fall.  This  statement  assumes,  of 
course,  that  there  has  been  no  proportionate  increase 
in  demand.     On  the  other  hand,  with  no  correspond- 

*  Hobson,  "The  Economics  of  Distribution,"  p.  60. 
195 


A    LIVING    WAGE 

ing  increase  in  supply,  an  increased  desire  for  coal 
in  those  whose  purchasing  power  is  ample,  or  an 
increase  in  the  purchasing  power  of  those  whose 
desire  has  heretofore  exceeded  their  purchasing 
power,  will  produce  a  rise,  just  as  changes  that 
point  the  other  way  will  produce  a  fall  in  price.  Two 
or  more  of  these  forces  may  operate  simultaneously, 
either  assisting  or  counteracting  one  another.  ^ 

From  this  brief  review  of  the  forces  that  deter- 
mine price,  we  can  readily  perceive  the  unsoundness 
of  the  theory  of  value  defended  by  the  founders  of 
socialism.  According  to  Karl  Marx,  the  value  of 
goods  is  determined  and  created  solely  by  labor,  is, 
in  fact,  merely  the  quantity  of  labor  they  embody.  ^ 
More  precisely,  the  value  of  any  commodity  is  de- 
termined by  the  average  labor  time  required  to  pro- 
duce it  in  a  given  condition  of  industry.  If  one 
coat  has  as  great  a  value  as  two  pairs  of  shoes,  the 
explanation  is  to  be  found  in  the  fact  that  the 
average  coat  maker — not  any  particular  individual 
— needs  twice  the  time  to  turn  out  one  coat  that 
the  average  shoe  maker  takes  to  produce  one  pair 
of  shoes.  Value,  therefore,  is  something  inherent 
in  goods,  put  there  solely  by  the  laborer. 

Now  labor  is  neither  the  sole  determinant  of  value 
nor  sufficient  of  itself  to  produce  value.  One  of 
the  most  obvious  facts  of  the  market  is  that  com- 
modities change  in  value  while  the  labor  contained  in 
them  remains  unchanged.  The  amount  of  labor 
expended  on  the  millinery  "creations"  that  were  in 

*  Cf .  Hobson,  op.  cit.,  81-84. 

•  See  "Capital,"  Part  I,  ch.  I. 

196 


FORCES  THAT  REGULATE  PRICE 

vogue  last  year  is  in  them  still,  but  they  no  longer 
have  the  same  value  or  sell  at  the  old  price.  Again, 
new  and  fertile  land  has  value,  although  it  has  not 
cost  labor.  Marx  attempts  to  meet  cases  of  this 
kind  by  saying  that  such  commodities  have  a  price 
but  no  value,  but,  since  he  admits  that  price  is  only 
"the  money  form  of  value,"  he  escapes  the  difficulty 
at  the  cost  of  self-contradiction.  At  any  rate,  if 
value  in  the  Socialist  theory  be  not  equivalent  to 
price  it  has  no  bearing  on  the  present  discussion ; 
for  the  problem  of  distribution  is  primarily  con- 
cerned with  the  price  of  things,  their  market  price. 
On  the  other  hand,  labor  cannot  of  itself  produce 
value.  Men  may  expend  indefinite  quantities  of 
labor  on  commodities,  yet  if  the  latter  are  not  wanted 
by  someone  they  will  have  no  value  and  bring  no 
price.  No  amount  of  labor  embodied  in  wooden 
shoes  will  give  them  value  to  a  community  that  will 
not  wear  wooden  shoes.  To  objections  of  this  na- 
ture Marx  replies  that  in  order  to  produce  value 
the  labor  exerted  must  be  socially  useful,  that  is, 
they  must  have  a  certain  utility  for  consumers ;  but 
this  is  a  virtual  admission  that  labor  is  not  the  sole 
determinant  of  value.  ^ 

The  simple  and  obvious  truth  of  the  matter  is  that 
the  value,  or  price,  of  goods  is  determined,  caused, 
regulated,  by  the  quantative  relations  between  supply 
and  demand,  and  that  the  determinant  forces  act 
from  both  sides.  On  the  side  of  supply  one  of 
the  determinants  is  labor,  but  it  is  not  the  only  one, 

'A  good  analysis  of  Marx'  theory  of  value  and  the  contra- 
dictions into  which  he  falls  will  be  found  in  John  Rae's  ''Con- 
temporary Socialism,"  2d  ed.,  pp.  160-166. 

197 


A    LIVING    WAGE 

and  even  if  it  were  it  would  not  be  all-important; 
for  the  forces  implied  in  demand  exercise  an  addi- 
tional and  distinct  influence. 

The  total  amount  of  money,  therefore,  that  is 
available  for  division  among  the  owners  of  the  fac- 
tors of  production — landlords,  undertakers,  capital- 
ists, and  laborers — in  any  industry  or  in  all  indus- 
tries, is  the  total  price  that  is  received  for  the  prod- 
uct. This  in  turn  is  determined  immediately  by 
the  quantative  relations  existing  between  the  supply 
of  and  the  demand  for  the  product,  and  remotely 
by  the  condition  of  natural  resources  and  the  ex- 
penses of  production,  on  the  one  hand,  and,  on  the 
other  hand,  by  the  desires  and  purchasing  power  of 
the  buyers.  Supply  and  demand  are  likewise  the 
immediate  determinants  of  the  price  that  is  paid 
for  the  use  of  any  factor  of  production.  In  order 
to  ascertain  the  possibilities  of  increasing  the  present 
price  of  underpaid  labor,  and  the  extent  to  which  the 
employer  and  other  industrial  functionaries  are  able 
and  obliged  to  convert  these  possibilities  into  reality, 
we  shall  make  a  brief  examination  of  the  remote 
forces  that  govern  the  rewards  of  each  factor.  A 
chapter  will  be  devoted  to  each  of  the  subjects  of 
rent,  profits,  interest,  and  wages. 


ig8 


CHAPTER  XI 


Rent 

The  surplus  produced  by  the  better  soils  and  locations 
is  called  rent.  Examples  of  both  kinds.  The  greater  the 
difference  between  a  better  field  and  the  poorest  field  in 
use,  the  higher  will  be  the  rent  of  the  former.  Rents  will 
not  increase  with  every  actual  extension  of  cultivation. 
Price  determines  rent,  not  vice  versa.  The  rent  of  city 
locations  is  governed  by  the  same  laws  as  that  of  agricul- 
tural lands.  Meaning  of  commercial  rent.  All  economic 
rent  tends  to  go  to  the  owner  of  the  land. 

In  any  agricultural  region  land  varies  both  in 
fertility  and  in  convenience  to  the  market.  As  a 
consequence,  equal  expenditures  of  labor  and  capital 
on  different  fields  do  not  produce  equal  net  returns. 
The  better  grades  of  soil  will  yield  larger  crops  than 
the  poorer  soils,  and  the  fields  nearer  to  the  market 
will,  owing  to  the  smaller  cost  of  marketing  their 
product,  yield  a  higher  net  profit  than  equally  fertile 
fields  that  are  not  so  well  situated.  Hence  differ- 
ences in  fertility  and  differences  in  situation  rela- 
tively to  the  market  will  cause  differences  in  the 
amounts  received  from  the  cultivation  of  land. 

Let  us  take  an  example  of  differences  in  fertility. 
An  expediture  of  $ioo  in  capital  and  labor  is 
applied   to  the  cultivation   of  each  of  three  fields 

199 


A    LIVING    WAGE 

with  the  result  that  the  first  produces  120,  the  sec- 
ond, no,  and  the  third,  100  bushels  of  wheat.  As- 
suming that  the  price  of  wheat  is  one  dollar  per 
bushel,  and  that  the  cost  of  marketing  is  included 
in  the  outlay  of  $100,  it  is  seen  that  the  product 
of  the  third  soil  just  meets  the  expenses  of  produc- 
tion, while  the  second  and  first  soils  yield  respect- 
ively ten  and  twenty  bushels — or  ten  and  twenty  dol- 
lars— above  the  amount  expended  upon  them  and  in 
excess  of  the  return  obtained  from  the  third  field. 
To  this  surplus  is  given  the  name  of  economic  rent. 
With  regard  to  lands  differing  in  fertility,  it  may 
be  defined  as  the  difference  between  the  product  of 
any  better  land  and  the  product  of  the  poorest  land 
that  is  put  to  the  same  use  with  the  same  expendi- 
ture of  labor  and  capital.  It  represents,  therefore, 
superior  productivity  of  soil. 

In  a  precisely  similar  way,  rents  will  arise  in  con- 
nection with  lands  that  are  variously  situated  with 
respect  to  the  market.  If  three  fields  yield  120 
bushels  of  wheat  each  with  expenses  of  cultivation 
of  $100  each,  and  if  the  greater  distance  of  the  sec- 
ond and  third  fields  from  the  market  necessitates  an 
additional  expenditure  of  ten  and  twenty  dollars 
respectively,  it  is  clear  that  the  first  field  will  pro- 
duce a  surplus  of  twenty  dollars  and  the  second  a 
surplus  of  ten  dollars.  These  amounts  are  rent,  and 
represent  not  superior  fertility  but  superior  loca- 
tion. Hence  a  definition  that  would  apply  to  both 
kinds  of  land  differences  might  be  framed  in  these 
terms:  Rent  is  that  surplus  which  is  yielded  by  all 
the  superior  soils  or  locations  above  the  poorest  soil 
200 


RENT 

or  location,  devoted  to  a  given  use  with  a  given  ex- 
penditure of  labor  and  capital.  It  may  also  be  de- 
fined as,  the  excess  yielded  by  land  beyond  the  ex- 
penses of  production,  xA.s  long  as  the  poorest  land 
returns  nothing  more  than  the  expenses  of  produc- 
tion, one  definition  is  equivalent  to  another;  but  as 
soon  as  it  produces  a  surplus,  the  former  definition 
ceases  to  express  as  much  as  the  latter. 

Manifestly  the  greater  the  difference  between  the 
more  fertile  or  better  situated  fields  and  the  poorest 
fields  in  use,  the  higher  will  be  their  rent.  Using 
the  first  of  the  two  examples  above  given,  and  as- 
suming an  increase  in  the  demand  for  wheat  that 
brings  the  price  up  to  $1.25  per  bushel,  we  see  that 
$100  worth  of  capital  and  labor  could  now  be  applied 
to  the  cultivation  of  a  field  that  would  yield  only 
eighty  bushels.  At  $1.25  per  bushel  the  crop  would 
cover  the  expenses  of  production.  But  the  three 
superior  fields  are  still  producing  respectively  100, 
no,  and  120  bushels,  which,  at  $1.25  per  bushel, 
means  a  surplus  of  $25,  $37.50,  and  $50.  Thus  the 
third  soil  now  pays  a  rent  for  the  first  time,  while 
the  rent  of  the  second  has  been  increased  by  $27.50, 
and  that  of  the  first  by  $30.  As  a  matter  of  fact, 
the  increase  in  rent  will  be  greater  than  this  if,  ow- 
ing to  the  enhanced  price  of  wheat,  an  additional 
amount  of  capital  and  labor  expended  on  the  better 
fields  will  produce  a  surplus  in  excess  of  the  new 
outlay.  If  an  additional  expenditure  of  $25  will  be 
followed  by  an  addition  of  twenty-two  bushels  to 
the  product,  the  rent  of  that  field  is  increased  by 
$2.50.     Should  the  price  of  wheat  rise  sufficiently  to 

201 


A    LIVING    WAGE 

make  profitable  the  cultivation  of  a  still  poorer  field, 
the  differential  advantages  of  the  three  better  soils 
would  be  further  augmented,  and  the  fourth  would 
yield  a  rent  equal  to  its  superiority  over  the  new 
field.  Therefore,  the  poorer  the  land  that  may 
profitably  be  cultiyated — the  farther  is  extended  the 
"margin  of  cultivation," — the  greater  will  be  the 
number  of  soils  yielding  rent,  and  the  higher  will  be 
the  rent  from  each. 

The  rent  of  lands  already  in  use  will  not,  however, 
increase  with  every  actual  extension  of  cultivation. 
It  would  not  be  true  to  say,  the  greater  the  amount 
of  land  in  use,  the  higher  the  rent  of  the  better 
fields.  The  cultivation  of  new  land  will  cause  a 
rise  in  rent  only  when  the  new  land  is  poorer,  either 
in  fertility  or  situation,  than  the  old.  This  is  not 
always  the  order  in  which  successive  increments  of 
land  are  taken  up.  Owing  to  ignorance,  inertia,  or 
want  of  opportunity  on  the  part  of  the  cultivators, 
some  of  the  better  lands  are  often  brought  into  use 
long  after  those  that  are  less  profitable.  The  effect 
of  this  process  is  to  reduce  instead  of  raising  the 
rents  of  the  older  lands.  The  extension  of  cultiva- 
tion to  lands  that  are  better  than  some  of  those  al- 
ready in  use  may  be  sufficient  to  increase  the  supply 
of  produce,  say,  wheat,  faster  than  the  demand  for 
it,  and  thus  reduce  its  price.  This  means  a  reduc- 
tion in  profits  and  in  rents. 

An  example  is  afforded  by  the  movement  of 
rents  within  the  last  half  century  in  England  and  in 
our  own  Eastern  States.  The  opening  up  of  im- 
mense tracts  of  land  in  the  West  in  conjunction  with 

202 


RENT 

the  improved  facilities  of  transportation,  has  low- 
ered the  price  of  farm  products  in  the  older  regions, 
thus  throwing  the  poorest  lands  out  of  cultivation  and 
lowering  rents. 

Since  rent  comes  into  existence  only  in  conse- 
quence of  a  rise  in  the  price  of  the  product,  it  is  in 
general  not  a  determinant  of  price.  The  order  of 
causality  is :  increase  of  demand  for  product ;  rise  in 
price  of  product ;  extension  of  cultivation  to  poorer 
land ;  appearance  of  rent  on  better  lands.  Strictly 
speaking,  the  last  two  phenomena  are  co-ordinate 
effects  of  increased  price  of  the  product ;  for  even 
in  the  absence  of  any  poorer  land,  the  fields  already 
in  use  would  now  yield  a  surplus  above  the  expenses 
of  production.  Though  not  a  difi:erential  gain  as 
between  one  soil  and  another,  this  surplus  is  a  dif- 
ferential relatively  to  costs,  is  due  to  land  as  dis- 
tinguished from  the  other  factors,  and  usually  ob- 
tains the  name  of  rent.  In  a  sense  this  absolute 
rent,  which  may  arise  both  when  all  lands  under 
cultivation  are  equally  advantageous  and  when  the 
poorest  land  yields  a  surplus,  does  determine  the 
price  of  the  product,  inasmuch  as  the  owners  of 
such  lands  could,  if  they  chose,  transfer  it  to  the 
consumers  in  the  form  of  lower  prices.  In  this  sense 
price  is  likewise,  within  certain  limits,  determined  by 
profits,  interest  and  wages.  Whatever  view  may  be 
taken  of  the  relation  between  the  rent  of  the  poorest 
land  and  price,  there  can  be  no  question  that  the 
rent  of  all  the  better  lands  is  not  a  cause  of  price  but 
an  effect.  Price  is  not  high  because  some  lands  pay 
a  high  rent,  but  some  lands  pay  a  high  rent  because 

203 


A    LIVING    WAGE 

price  is  high.  That  part  of  the  necessary  supply 
which  is  raised  on  the  poorest  land — the  last  portion 
of  the  supply — must  bring  a  price  sufficiently  high 
to  cover  the  expenses  of  producing  it;  those  por- 
tions that  come  from  all  the  better  lands  will  sell  at 
the  same  price.  Hence  the  emergence  of  rent. 
Whether  the  rent  is  retained  by  the  owners  of  the 
land,  or  handed  over  to  the  State,  or  destroyed,  the 
price  will  remain  the  same;  for  it  is  determined  by 
the  relation  between  demand  and  supply.  The  in- 
crease in  demand  which  precedes  the  appearance  of 
rent  or  its  increase,  is  caused  by  an  increase  in  the 
purchasing  power  or  in  the  desires  of  the  consumers ; 
the  failure  of  the  supply  to  keep  pace  with  the  en- 
hanced demand  is  due  to  the  scarcity  of  the  better 
soils  or  locations.  From  the  side  of  supply,  there- 
fore, the  last  mentioned  factor  is  fundamental  in 
producing  the  rise  in  price,  the  extension  of  cultiva- 
tion to  poorer  lands,  and  the  appearance  and  increase 
of  rent.  ^ 

*  The  assertion  that  rent  does  not  determine  price,  or  rather, 
that  prices  are  not  higher  because  of  the  existence  of  rent, 
assumes  individual  management  of  agriculture.  If  the  State 
were  to  direct  the  cultivation  and  sell  the  products  of  all  the 
lands  in  a  community,  with  the  present  outlay  for  tilling  and 
marketing,  it  could  obviously  reduce  the  price  of  the  product  to 
an  extent  equivalent  to  the  present  payments  for  rent.  The 
expenses  of  production  on  all  of  the  four  fields  referred  to 
above  were  $400;  the  total  product,  410  bushels  of  wheat;  and 
the  rent  on  all  three  of  the  better  fields,  $112.50.  Under  a 
system  of  unified  management  the  whole  crop  could  be  sold  for 
$400  instead  of  $512.50,  or  $0.97.5  instead  of  $1.25  per  bushel. 
Still,  the  true  cause  of  this  difference  in  price  is  not  rent  but 
the  private  management  of  production,  which  requires  that  the 
common  price  be  sufficiently  high  to  cover  the  cost  of  produc- 
tion of  the  most  expensive  portion  of  the  supply,  and  auto- 
matically leaves  a  surplus  to  the  owners  of  the  better  lands. 
This  point  is  made,  not  as  an  argument  for  collectivism — in 

204 


RENT 

The  same  general  laws  that  govern  agricultural 
rent  apply  to  the  rent  of  city  lots  and  locations.  All 
the  better  locations  will  produce  a  surplus  above  the 
return  from  an  equal  amount  of  capital  and  labor 
employed  on  the  site  whose  situation  is  poorest.  The 
expense  of  producing  a  given  amount  of  goods  will 
be  less  on  some  sites  than  on  others,  as  in  the  case 
of  a  mill  that  has  superior  water-power  facilities, 
or  a  jobbing  establishment  that  is  nearer  to  the  rail- 
way station.  Again,  the  volume  of  business  done 
with  a  given  expenditure  of  capital  and  labor  will 
be  different  on  different  locations.  If  a  clothing 
merchant  in  the  center  of  a  city  can  in  one  year 
make  twice  as  many  sales  as  a  competitor  who  em- 
ploys the  same  quantity  of  capital  and  labor  and 
sells  at  the  same  price  on  the  outskirts  of  the  city, 
he  will  obtain  a  surplus  gain  that  will  be  due  solely 
to  his  more  profitable  situation.  Since  the  surplus 
represents  the  superior  earning  capacity  of  the  bet- 
ter site,  it  is  rent. 

Commercial  rent,  the  rent  of  ordinary  business 
language,  is  economic  rent  plus  interest  on  the  capi- 
tal invested  in  improvements.  If  a  merchant  pays 
$1,200  annually  for  the  use  of  a  building  and  lot,  if 
the  building  is  worth  $10,000,  and  if  the  prevailing 
return  from  such  investments  is  six  per  cent,  only 
one-half  of  the  $1,200  is  economic  rent.  The  other 
half  is  interest  on  the  capital  invested  in  the  build- 
ing. 

Under  the  present  system  of  landholding,  all  eco- 

which  the  writer  most  emphatically  does  not  believe. — but  as  an 
attempt  at  a  complete  statement  of  the  relations  between  rent 
and  price. 

205 


A    LIVING    WAGE 

nomic  rent,  even  the  surplus  arising  on  the  poorest 
soils  or  locations  in  use,  will  go  or  tend  to  go  to  the 
owners  of  the  land.  The  tendency  will  invariably- 
become  a  reality  when  the  owner  of  the  land  is  also 
its  cultivator  or  occupier.  When  the  owner  hires 
the  use  of  the  land  to  someone  else  he  will  usually 
get  practically  all  the  rent,  at  least  in  the  long  run. 
The  cultivator  of  the  120-bushel  wheat  tract  that 
we  have  already  considered  might  for  a  time  obtain 
the  use  of  it  for,  say,  $10  per  year.  With  wheat 
selling  at  $1  per  bushel  and  the  cost  of  producing 
the  crop  only  $100,  he  would,  therefore,  secure  half 
the  economic  rent.  Ordinarily,  however,  he  could 
not  long  retain  this  advantage,  as  other  cultivators 
would  offer  the  owner  a  higher  rent,  or  the  latter 
would  himself  discover  the  advantage  enjoyed  by 
the  present  tenant.  Sooner  or  later  the  owner 
would  get  substantially  all  the  excess  over  the 
usual  cost  of  production.  The  same  law  holds 
for  locations  in  cities.  ^ 

*  For  a  more  extended  exposition  of  the  theory  of  rent  any 
standard  manual  of  economics  will  be  found  satisfactory.  A 
very  thorough  discussion  of  the  subject  in  all  its  phases  is 
contained  in  Walker's  "Land  and  its  Rent."  Clark  takes  ex- 
ception to  the  prevailing  statement  of  the  relation  of  rent  to 
price  in  his  "Distribution  of  Wealth,"  ch.  XXIII. 


206 


CHAPTER  XII 


Profits 

Profits  constitute  the  share  of  the  undertaker.  They 
tend,  in  the  case  of  the  majority  of  undertakers,  to  a  com- 
mon and  minimum  level.  This  minimum  determines 
the  price  of  the  product.  Exceptionally  large  profits  have 
no  influence  on  price.  The  elimination  of  some  of  the  ex- 
isting undertakers  would  result  in  a  reduction  of  prices  and 
of  the  total  volume  of  profits.  In  the  case  of  joint-stock 
companies  profits  do  not  arise  as  a  distinct  share  of  the 
product. 

In  the  strict  sense  the  term  profits  denotes  that 
share  of  the  product  that  is  taken  by  the  owner  of  a 
business  for  his  services  as  the  director  of  its  move- 
ments and  the  taker  of  its  risks.  Such  a  person  is 
variously  called  the  employer,  the  entrepreneur,  the 
undertaker,  the  business  man.  His  function  in  in- 
dustry is  to  estimate  the  public  demand  for  goods, 
and  to  organize,  direct  and  pay  for  the  capital  and 
labor  required  to  meet  the  demand.  Being  the  re- 
sponsible head  of  the  business  he  controls,  he  does 
not  look  to  someone  else  for  his  remuneration.  This 
he  must  himself  provide  out  of  the  gross  profits  of 
the  undertaking,  that  is,  out  of  that  part  of  the 
product  that  remains  after  wages  and  salaries,  inter- 
est on  borrowed  capital,  commercial  rent,  and  the 
207 


A    LIVING    WAGE 

cost  of  materials  have  been  deducted.  Out  of  this 
gross  profit  must  come  interest  on  his  own  capital 
used  in  the  business,  an  allowance  to  replace  the 
wear  and  tear  of  productive  instruments,  a  certain 
amount  for  insurance  against  unfavorable  years,  and 
finally  his  personal  reward  for  labor  and  for  such 
risks  of  the  business  as  are  not  covered  by  an  insur- 
ance or  reserve  fund. 

The  undertaker's  share  of  the  product  of  industry 
is  evidently  a  variable  one.  Its  size  will  depend  up- 
on his  ability  to  forecast  the  demand  for  his  goods, 
and  his  success  in  putting  the  latter  on  the  market 
at  a  minimum  cost.  The  more  accurately  he  can 
gauge  the  tastes  and  purchasing  power  of  the  public, 
and  the  lower  he  can  reduce  the  outlay  for  capital 
and  labor,  the  greater  will  be  his  net  profits.  How- 
ever, the  rewards  of  the  majority  of  business  men, 
at  least  in  undertakings  of  the  same  general  kind 
and  size,  tend  toward  a  common  and  minimum  level. 
Those  who  possess  exceptional  ability,  or  who  oc- 
cupy a  favored  position  on  account  of  established 
reputation,  patents,  government  assistance,  or  some 
kind  of  monopoly  advantage,  will,  of  course,  get 
more  than  this  minimum.  ^ 

As  long  as  the  goods  produced  by  those  under- 
takers who  obtain  the  minimum  amount  of  profits 

^  The  theory  even  in  a  modified  form  of  an  equal  rate  of 
profits  is  criticized  as  inaccurate  by  Devas ;  "Political  Econ- 
omy," pp.  437-442,  2d  ed.  But  after  all  due  allowance  is  made 
for  the  presence  of  monopoly  profits,  the  statement  in  the  text 
still  seems  to  be  substantially  correct.  For  a  fuller  treatment 
of  profits  the  reader  is  referred  to  Marshall's  "Principles  of 
Economics,"  Hadley's  "Economics,"  and  Carver's  "Distribution 
of  Wealth." 

208 


PROFITS 

are  a  necessary  portion  of  the  supply,  the  price  of 
the  entire  supply  will  be  determined  by  this  mini- 
mum. If  the  lowest  paid  class  of  business  men  can- 
not put  a  certain  kind  of  goods  on  the  market  at  a 
lower  cost  for  capital  and  labor  than  ninety  cents 
per  unit  of  product,  and  if  they  will  not  accept  less 
than  ten  cents  as  profit,  the  selling  price  of  the  goods 
must  be  one  dollar.  Any  lower  price  would  drive 
these  men  out  of  business  and  stop  a  necessary 
part  of  the  supply.  With  supply  thus  curtailed, 
prices  would  again  rise  to  the  point  required  to  at- 
tract their  services.  Hence  the  normal  or  minimum 
rate  of  profits  is  an  essential  part  of  the  cost  of 
production,  and  enters  into  the  determination  of  the 
price  of  the  product. 

Undertakers  having  exceptional  ability  or  ex- 
ceptional opportunity  will  sell  their  goods  at  the 
common  price,  and  therefore  obtain  exceptional 
profits.  This  surplus,  sometimes  called  pure  profit, 
is  a  differential  gain,  just  as  the  rent  of  land  is  a 
differential  gain.  It  is  due  to  advantages,  not  of 
fertility  or  location,  but  of  ability  and  opportunity. 
Like  the  rent  of  land,  it  does  not  influence  price ; 
for  it  comes  into  existence  as  a  consequence  of  the 
price  that  is  required  to  cover  the  higher  cost  of 
production  entailed  by  the  other  undertakers. 

From  the  fact  that  the  price  of  goods  must  be 
sufficiently  high  to  yield  the  minimum  amount  of 
profits  to  all  those  undertakers  who  furnish  a  neces- 
sary portion  of  the  supply,  it  does  not  follow  that 
none  of  the  undertakers  who  at  present  contribute 
regularly  to  the  product  and  obtain  the  normal  rate 

14  209 


A    LIVING    WAGE 

of  profit  could  go  out  of  the  business  without  caus- 
ing a  rise  in  price.  Since  all  the  existing  under- 
takers are  not  turning  out  the  full  product  of  which 
they  are  capable,  some  of  them,  especially  in  the 
retail  trades,  could  be  dispensed  with,  while  those 
who  remained  would  be  able  to  keep  up  and  even 
increase  the  current  supply.  That  the  survivors 
would  increase  the  total  supply  is  practically  certain, 
owing  to  the  larger  volume  of  individual  profits 
that  would  be  assured  from  a  larger  individual  out- 
put. The  final  results  would  be  a  fall  in  price  and 
a  decrease  in  the  size  of  the  total  share  of  industry 
obtained  by  undertakers  in  the  form  of  profits.  ^ 

Profits  in  the  strict  sense  of  a  necessary  return 
to  one  of  the  agents  of  production,  arise  only  in  con- 
nection with  the  private  business  or  firm,  as  dis- 
tinguished from  the  joint-stock  company  or  corpora- 
tion. In  the  latter  the  function  of  active  direction 
is  discharged  by  the  officers  and  the  board  of  direct- 
ors who  receive  fixed  salaries,  while  the  risks  are 
assumed  by  the  whole  body  of  stockholders,  and  are 
provided  for  either  by  a  reserve  fund  or  in  the  form 
of  a  sufficiently  high  rate  of  dividend.  Hence  the 
product  of  these  businesses  is  regularly  divided  into 
only  three  shares,  namely,  wages  and  salaries,  inter- 
est, and  rent. 

*  Cf.  Veblen,  "The  Theory  of  Business  Enterprise,"  ch.  III. 


210 


CHAPTER  XIII 


Interest 

Interest  is  the  price  paid  to  the  capitalist  for  the  use  of 
the  material  instruments  of  production.  It  comes  out  of 
the  product  that  these  instruments  help  to  create.  But  it  is 
reckoned  on  the  basis  of  capital-value.  All  capital  tends 
to  yield  the  same  rate  of  interest.  The  rate  is  determined 
immediately  by  the  relation  of  supply  to  demand,  remotely 
by  two  factors  on  the  side  of  supply  and  three  on  the  side 
of  demand.  It  is  measured  by  the  productivity  of  the  least 
productive  material  capital  that  continues  to  be  used  and 
to  attract  investments.  The  relation  between  interest  and 
wages :  (a)  when  there  is  no  change  in  the  organization  or 
in  the  methods  of  production;  (b)  when  such  changes  take 
place. 

Interest  is  the  share  of  the  product  of  industry  re- 
ceived by  the  capitahst.  By  the  capitaHst  is  meant 
the  man  whose  money  is  invested  in  the  material  in- 
struments of  production:  he  may  own  the  instru- 
ments himself,  or  he  may  have  loaned  his  money  to 
someone  else  who  assumes  the  function  of  investor 
and  owner.  Fundamentally,  therefore,  interest  is 
a  return  for,  a  price  paid  for,  the  use  of  material 
capital.  For  when  a  man  borrows  money  and 
agrees  to  pay  interest  on  it,  his  final  motive  is  al- 
ways the  utility  that  he  expects  to  derive  from  the 
things  that  the  borrowed  money  will  enable  him  to 

211 


A    LIVING    WAGE 

obtain.  These  things  may  be  either  consumers' 
goods,  such  as  food  and  clothing,  or  producers' 
goods,  such  as  factories  and  railroads.  In  either 
case,  the  ultimate  reason  why  he  pays  interest  is  to 
be  sought  not  in  the  money  that  he  has  borrowed, 
but  in  the  concrete  utilities  for  which  the  money  is 
exchanged.  With  the  interest  that  is  paid  on  loans 
for  purposes  of  consumption  we  have  no  concern; 
we  deal  with  interest  only  in  so  far  as  it  is  one  of  the 
shares  of  the  product  of  industry.  Hence  the  defi- 
nition of  it  as,  the  share  received  by  the  capitalist, 
or,  the  return  for  the  use  of  the  material  instruments 
of  production. 

The  source  of  this  interest  is  to  be  found  in  the 
product  which  is  created  through  the  agency  of  ma- 
terial capital.  A  plow  manufacturer,  for  example, 
agrees  to  pay  interest  on  money  that  he  has  bor- 
rowed and  exchanged  for  machinery,  because  he 
knows  that  the  plows  which  will  thereby  be  produced 
will  sell  for  a  price  that  will  enable  him  to  pay  in- 
terest in  addition  to  all  the  other  costs  of  produc- 
tion. The  product  that  is  turned  out  with  the  aid 
of  machinery  is  so  much  larger  than  the  product 
that  would  have  come  into  being  without  it,  that  it 
covers  wages,  profits,  rent,  depreciation  and  inter- 
est. ^  If  the  owner  of  the  business  has  invested  some 
of  his  own  money  in  its  equipment  he  will  likewise 

*  A  moderate  statement  of  the  productivity-theory  of  inter- 
est, and  an  effective  criticism  of  Boehm-Bawerk's  theory,  will 
be  found  in  Hobson's  "Economics  of  Distribution,"  ch.  IX.  The 
statements  contained  in  the  text  above  are,  however,  consistent 
with  either  theory;  for  no  explanation  is  attempted  of  the  fact 
that  the  product  will  have  a  value  sufficiently  large  to  cover 
interest. 

212 


INTEREST 

levy  interest  on  the  product,  according  to  the  amount 
of  his  investment.  In  this  case  he  will  retain  the 
interest  payment  himself. 

Although  interest  is  ultimately  paid  for  the  use  of 
the  material  instruments  of  production  and  out  of 
the  product  that  is  created  through  their  agency,  it 
is  reckoned  and  measured  in  terms  of  percentage 
and  value.  The  man  who  has  equipped  his  busi- 
ness with  borrowed  capital  does  not  pay  a  certain 
rent  adjusted  according  to  the  number  and  kind  of 
certain  instruments,  such  as  machinery,  wagons, 
buildings,  etc.  On  the  money  that  he  has  borrowed, 
considered  as  a  sum  of  value,  say,  $100,000,  he  an- 
nually pays  a  fraction  of  this  amount,  say,  five  per 
cent.  He  will  measure  in  the  same  way  the  interest 
that  he  gets  or  desires  to  get  on  any  money  of  his 
own  that  he  has  invested.  To  put  the  matter 
technically,  the  rate  of  interest  is  estimated  not  on 
capital-instruments,  but  on  capital-value. 

Since  interest  is  measured  in  this  way,  and  since 
there  is  always  new  capital  seeking  investment,  all 
portions  of  capital  within  a  region  in  which  active 
economic  inter-communication  exists  are  in  competi- 
tion, and  the  tendency  is  toward  one  rate  of  interest. 
Those  borrowers  who  conduct  exceptionally  prof- 
itable businesses  can  obtain  money  as  cheaply  as 
those  whose  enterprises  yield  smaller  returns. 
Those  who  happen  to  be  paying  an  unusually  high 
rate  will  cease  to  do  so  as  soon  as  the  time  of  the 
existing  loan  expires.  They  will  either  compel  their 
present  creditors  to  reloan  the  money  at  the  pre- 
vailing rate,  or  replace  it  with  money  borrowed  from 
213 


A    LIVING    WAGE 

son^eone  else.  Tluj  ability  of  new  capital-value  to 
displace  that  already  invested  prevents  the  latter 
from  returning  an  exceptional  rate  of  interest  to  the 
man  who  has  loaned  it,  just  as  the  presence  of  a 
second  merchant  in  a  market  makes  it  impossible 
for  the  first  to  charge  an  arbitrary  price  for  his 
wares.  Even  in  the  case  of  capital-instruments 
that  have  been  purchased  with  the  money  of  their 
owner,  and  that  are  yielding  abnormally  high  re- 
turns, as,  for  example,  the  machinery  in  a  very  rich 
mine, — there  is  a  sense  in  which  the  rate  of  interest 
is  only  normal.  For  the  owner  will  capitalize  the 
extra  returns,  and  value  his  capital,  not  according 
to  the  amount  of  dollars  invested,  but  in  proportion 
to  its  actual  earning  power.  If  the  interest  return 
is  equivalent  to  ten  per  cent,  on  his  investment  and 
if  the  prevailing  rate  is  five  per  cent.,  he  will  reckon 
the  business  as  worth  twice  the  amount  he  put  into 
it.  And  this  will  be  its  market  or  selling  price.  On 
this  basis,  therefore,  the  actual  revenue  will  provide 
only  the  ordinary  rate  of  interest. 

How  is  it,  then,  that  capital  brings  different  rates 
even  in  the  same  local  market?  Strictly  speaking, 
those  percentages  by  which  the  normal  or  prevailing 
rate  is  exceeded  are  not  of  the  nature  of  true  inter- 
est. They  are  either  a  compensation  for  the  unusual 
risk  involved  in  the  loan,  an  extortion  levied  upon 
the  ignorance  or  dire  need  of  the  borrower,  or  a 
monopoly  tribute  exacted  on  account  of  a  tempo- 
rary stringency  in  the  money  market.  When  it  is 
asserted  that  there  is  a  common  rate  of  interest,  what 
is  meant  is  that  capital  loaned  in  average  conditions 
214 


INTEREST 

of  security,  knowledge,  and  bargaining  power,  yields 
approximately  one  rate  of  interest. 

The  rate  of  interest,  the  price  paid  for  the  use  of 
capital,  is,  like  the  price  of  any  other  economic  good, 
proximately  regulated  by  the  quantative  relations 
between  supply  and  demand.  Supply  is  made  up  of 
the  different  amounts  of  money  that  men  are  will- 
ing to  lend  at  different  rates ;  demand  of  the  various 
quantities  that  men  will  take  at  various  rates.  The 
actual  rate  is  a  resultant  of  this  two-sided  competi- 
tion, and  must  always  be  at  that  point  at  which  sup- 
ply and  demand  are  in  equilibrium.  A  change  in  the 
rate  can  occur  only  in  consequence  of  a  previous 
change  in  the  quantative  relation  of  these  immediate 
determinants.  When  the  supply  of  capital  increases 
faster  than  the  concurrent  demand,  the  rate  of  inter- 
est will  fall,  and  vice  versa.  The  remote,  or  ulti- 
mate, forces  regulating  the  rate  are  chiefly :  on  the 
side  of  supply,  the  industrial  resources  of  the  com- 
munity, and  the  relative  strength  of  its  habits  of 
spending  and  saving;  on  the  side  of  demand,  the 
productivity  or  perfection  of  existing  capital-instru- 
ments, the  comparative  intensity  of  men's  desires  to 
lend  their  money  for  a  small  but  secure  gain  and  to 
invest  it  themselves  for  a  larger  but  less  certain  re- 
turn, and  the  relative  supply  of  land,  business  ability, 
and  labor.  A  community  that  is  rich  in  productive 
resources,  natural  or  artificial,  will  evidently  be 
able  to  create  more  capital  than  one  that  is  poorer  in 
these  conditions,  while  a  thrifty  or  parsimonious 
people  will  have  more  than  a  shiftless  or  extravagant 
one.     On  the  other  hand,  when  the  existing  forms 

2IS 


A    LIVING    WAGE 

of  material  capital  turn  out  a  large  product  in  pro- 
portion to  their  cost,  when  the  amount  of  capital 
owned  by  persons  who  prefer  large  risks  and  large 
gains  to  small  risks  and  small  gains  is  great,  or  when 
the  supply  of  land,  business  ability,  and  labor  is 
abundant  relatively  to  the  supply  of  capital,  the  de- 
mand for  the  latter  will  be  greater  than  when  the 
opposite  conditions  prevail.  These  assertions  con- 
cerning the  influence  of  the  remote  factors  on  the 
rate  of  interest  assume,  of  course,  that  in  each  in- 
stance all  the  other  conditions  remain  unchanged. 
The  rate  of  interest  may  properly  be  compared 
with  and  stated  in  terms  of  each  of  the  five  remote 
factors,  provided  that  the  causal  influence  of  the 
other  four  be  not  denied  but  merely  assumed  to  con- 
tinue stable  in  the  midst  of  the  variations  of  the 
factor  under  discussion.  In  any  such  presentation 
of  the  matter  the  single  factor  is  regarded,  not  as 
wholly  determining,  but  as  accurately  measuring  the 
level  and  movement  of  the  rate.  Of  these  compar- 
isons the  most  suggestive  and  fruitful  relate  to  the 
productivity  of  capital-instruments  and  the  supply 
of  labor.  Different  businesses  yield  different  rates 
of  profit  per  unit  of  capital-value  contained  in  them, 
but  the  poorest  of  them  must,  if  they  are  to  continue 
to  attract  investments,  produce  a  return  eqtiivalent 
to  the  prevailing  rate  of  interest  on  loans.  Material 
capital  that  fails  to  yield  this  minimum  may,  indeed, 
continue  to  be  used,  especially  when  it  has  been 
bought  with  money  owned  by  the  owner  of  the  busi- 
ness, but  it  will  not  become  the  receptacle  of  new 
capital-value.  In  other  words,  concrete  capital  of 
216 


INTEREST 

this  kind  will  not,  generally  speaking,  be  replaced 
or  increased,  and  consequently  will  have  no  definite 
relation  to  the  current  rate  of  interest.  But  the 
productivity  of,  the  percentage  of  profit  returned 
by  the  least  productive  instruments  into  which  capi- 
tal continues  to  flow,  will  fix,  or  measure,  the  re- 
muneration of  all  capital.  Those  portions  of  capital 
that  are  loaned  to  the  users  of  instruments  which 
have  a  higher  productivity,  will  not  command  a  high- 
er rate,  any  more  than  a  pair  of  shoes  sold  to  a  rich 
man  will  fetch  more  than  the  market  price.  This 
class  of  borrowers  can  afford  to  pay  more  for 
loans  than  those  who  are  putting  money  into  the 
poorer  instruments,  but  they  need  not  and  will  not 
do  so,  as  long  as  capital  is  freely  and  continuously 
offered  and  obtained  at  a  lower  rate  in  the  same 
market. 

In  order  to  estimate  the  effect  of  labor  supply  on 
the  rate  of  interest,  let  us  first  take  a  situation  in 
which  labor  and  capital  continue  for  sometime  to  be 
combined  in  the  same  forms,  in  the  same  manner, 
and  in  the  same  proportions.  Labor  is  displaced 
neither  by  new  types  of  machinery  nor  by  improve- 
ments in  the  old  types.  All  the  conditions  of  the 
productive  process  are  so  stable  that  a  given  quan- 
tity of  a  given  kind  of  goods  is  produced  by  precisely 
the  same  amounts  of  labor  and  capital  that  were  re- 
quired five  years  ago.  In  these  circumstances 
equal  increases  of  labor  and  capital  will  not  disturb 
the  relation  between  their  rates  of  remuneration. 
Wages  will  bear  the  same  relation  to  interest  after 
as  before  the  change.     Neither  will  gain  relatively 

217 


A    LIVING    WAGE 

to  the  other ;  for  each  addition  to  the  supply  of  labor 
is  balanced  by  an  equal  proportion  of  increase  in  the 
supply  of  capital,  and,  since  there  has  been  no  change 
in  the  methods  of  production,  the  demand  for  both 
is  affected  in  the  same  degree.  It  is  not  maintained 
that  the  owners  would  get  the  same  proportion  of  the 
total  product  as  formerly,  for  the  shares  of  the 
undertaker  or  landowner  might  be  augmented  at  the 
expense  of  the  capitalist  and  the  laborer;  nor  that 
the  rates  of  wages  and  interest  would  remain  the 
same  numerically, — that,  for  example,  the  former 
rates  of  two  dollars  per  day  for  labor  and  six  per 
cent,  per  annum  for  capital  would  still  be  main- 
tained,— for  they  might  suffer  a  change  on  account 
of  a  rise  or  fall  in  the  price  of  products.  A  change 
of  the  latter  kind  would,  however,  affect  wages  and 
interest  in  equal  proportions. 

When  capital  and  labor  do  not  increase  in  the 
same  degree,  the  existing  ratio  between  the  rates  of 
interest  and  of  wages  will  be  disturbed.  If  capital 
increases  faster  than  labor,  interest  will  fall  relatively 
to  wages,  and  vice  versa.  A  decline  in  the  rate  of 
interest  from  six  to  five  per  cent,  will  not  be  ac- 
companied by  a  fall  of  wages  from  $2.00  to  $1.66^. 
In  fact,  wages  might  rise  above  two  dollars.  What- 
ever the  new  wage-rate  might  be  absolutely,  it  would 
be  relatively  higher  than  the  new  rate  of  interest. 
The  laborer  would  have  gained  in  comparison  with 
the  capitalist.  Obviously  these  statements  are 
merely  a  particular  application  of  the  law  of  supply 
and  demand.  When  the  price  of  wheat  falls  in 
consequence  of  an  increase  in  supply,  the  decline  is 
218 


INTEREST 

relative  to  the  price  of  other  goods.  The  vital  fact 
is  that  the  supply  of  other  goods  has  not  increased 
as  rapidly  as  the  supply  of  wheat.  In  like  manner 
when  the  supply  of  capital  increases  at  a  more  rapid 
rate  than  the  labor  supply,  its  price  will  fall  relatively 
to  the  price  of  labor.  Demand  for  labor  is  now 
larger  than  the  demand  for  capital ;  the  extra  amount 
of  capital  will,  so  to  speak,  run  after  labor ;  competi- 
tion is  less  active  among  owners  of  labor  than  among 
owners  of  capital.  ^ 

The  analysis  contained  in  the  two  preceding  para- 
graphs assumes,  as  already  stated,  that  no  change 
takes  place  in  the  organization  of  industry  or  in  the 
methods  of  production.  The  assumption  evidently 
does  not  correspond  with  actual  conditions.  Under 
our  regime  of  large-scale  production,  the  organiza- 
tion of  the  productive  factors  suffers  continuous 
modification.  The  new  forms  in  which  labor  and 
capital  are  combined  effect  a  saving  in  the  amount 
of  each  that  is  required  to  make  a  given  amount  of 
product.  When  a  number  of  independent  estab- 
lishments are  consolidated  a  considerable  portion  of 
the  former  labor  force  is  rendered  unnecessary, 
while  the  poorer  factories  can  be  closed  and  the 
better  ones  operated  at  their  full  capacity.  Assum- 
ing that  the  total  price  received  for  the  product  re- 
mains what  it  was  before,  the  result  will  be  an  in- 

^  Cf.  Sidgwick,  "Principles  of  Political  Economy,"  vol.  i,  p. 
347  ;  Clark,  "The  Distribution  of  Wealth,"  chs.  XI  and  XII ; 
and  Hobson,  "The  Economics  of  Distribution,"  ch.  VI.  The 
student  of  the  general  subject  of  interest  may  consult,  in  addi- 
tion to  the  volumes  just  mentioned,  Boehm-Bawerk's  "Capital 
and  Interest,"  and  "Positive  Theory  of  Capital,"  and  the 
works  of  Marshall,  Hadley,  and  Carver  cited  in  the  last 
chapter. 

219 


A    LIVING    WAGE 

crease  in  the  supply  of  labor  and  capital  relatively 
to  the  demand  for  them,  and  a  decrease  in  their  re- 
muneration. Reference  is  to  the  whole  amount  of 
labor  and  capital  in  an  economic  community,  and  to 
what  will  happen  in  the  long  run.  These  unfavor- 
able changes  in  earnings  will  bear  less  harshly  on 
that  factor  in  which  there  has  been  less  saving.  If 
the  proportion  of  capital  that  has  been  dispensed 
with  is  greater  than  that  of  labor — say,  one-sixth  in 
the  former  case  and  one-seventh  in  the  latter — the 
advantage  will  be  on  the  side  of  labor,  and  interest 
will  fall  relatively  to  wages. 

Such  changes  in  the  methods  of  production  as  the 
introduction  of  new  forms  of  machinery  and  of  im- 
provements in  existing  forms,  will  supplant  labor 
by  capital,  and  increase  disproportionately  the  sup- 
ply of  labor.  As  a  matter  of  fact,  capital  is  increas- 
ing much  faster  than  labor,  but  the  gain  to  the  latter 
is  not  correspondingly  large.  ^  Some  of  the  new 
capital  is  not  merely  competing  with  other  capital 
for  an  opportunity  to  engage  labor,  but  becomes  a 
competitor  with  labor  in  operations  that  have  hither- 
to been  monopolized  by  the  latter.  In  these  opera- 
tions capital  is  no  longer  labor's  auxiliary ;  it  is  now 
labor's  rival.  For  example,  capital  that  under  the 
old  conditions  would  have  gone  into  type  and  type- 
setters' cases  is  now  embodied  in  typesetting  ma- 
chines which  take  the  place  of  men.  The  process 
of  substitution,  of  which  this  is  only  one  instance, 

^Between  1890  and  1900  the  increase  of  capital  in  the 
manufacturing  industries  of  the  country  was  51  per  cent.,  that 
of  labor  only  25  per  cent. ;  but  there  was  no  corresponding  fall 
of  interest  relatively  to  wages.  Cf.  "Final  Report  of  the  In- 
dustrial Commission,"  pp.  491-2. 
220 


INTEREST 

means  an  increase  in  the  demand  for  capital  relative- 
ly to  the  demand  for  labor,  and  consequently  a 
tendency  toward  a  high  rate  of  interest  relatively  to 
the  rate  of  wages.  If  the  laborers  that  have  been 
supplanted  by  the  new  machinery  cannot  readily 
find  employment  in  other  occupations,  this  tendency 
will  become  a  reality.  The  increased  amount  of 
unemployment  among  laborers  will  offset  to  a  great- 
er or  less  degree  the  advantage  that  comes  to  labor 
from  a  disproportionately  rapid  increase  in  the  sup- 
ply of  capital.  While,  therefore,  capital  is  actually 
increasing  faster  than  labor,  a  part  of  it  is  displacing 
labor,  and  the  relative  movements  of  interest  and 
wages  are  determined  on  the  one  hand  by  the  ex- 
tent of  the  displacement  and  on  the  other  by  the  de- 
mand for  the  displaced  labor  in  other  departments 
of  industry. 


'J2l 


CHAPTER  XIV 


Wages 

Wages  are  a  return  for  utilities  created  by  labor.  Since 
laborers  are  divided  into  non-competing  groups,  there  is  no 
common  rate  of  wages.  The  three  chief  limitations  of  com- 
petition among  the  different  groups.  Wages  in  any  group 
are  determined  immediately  by  supply  and  demand,  re- 
motely by  a  number  of  distinct  forces.  They  approximate 
the  productivity  of  the  least  productive  members  of  the 
group,  that  is,  the  value  of  the  product  of  these  members. 
The  relation  between  wages  and  interest.  The  determin- 
ants of  general  wages. 

Wages  denote  the  remuneration  of  the  man  who 
sells  his  labor  to  an  employer  at  a  certain  rate  per 
unit  of  time  or  per  unit  of  product.  The  last  clause 
points  to  the  division  of  laborers  into  time  workers 
and  piece  workers.  The  energy  exerted  by  the 
laborer  brings  into  being  utilities,  which  are  either 
immaterial,  as  the  personal  services  rendered  by  the 
valet  and  the  coachman,  or  material,  as  in  the 
case  of  the  weaver  and  the  bricklayer.  What  is 
ultimately  paid  for  in  every  instance  is  the  utility 
that  is  created,  rather  than  the  energy  that  is  ex- 
pended ;  just  as  interest  is  paid  for  the  utility  that  is 
derived  from  the  use  of  the  borrowed  money,  and  not 
for  the  mere  transfer  of  the  money  in  the  form  of  a 

222 


WAGES 

loan.  In  the  great  majority  of  labor  contracts  the 
utility  that  the  laborer  creates  or  helps  to  create  is 
re-sold  by  his  employer;  and  the  remuneration  that 
he  receives  is  simply  his.  share  of  the  joint  product 
to  which  he  has  contributed  in  conjunction  with  the 
other  factors  of  production.  His  wage  comes  out 
of  his  product.  Sometimes,  however,  the  employer, 
instead  of  re-selling  the  utility  created  by  his  em- 
ployee, consumes  it  himself.  In  this  case  wages  are 
derived  from  the  employer's  personal  income,  not 
from  the  product  of  the  labor  given  in  exchange  for 
them.  Examples  will  readily  occur  in  many  forms 
of  domestic  and  professional  service.  Even  this 
class  is  remunerated  ultimately  out  of  the  total  prod- 
uct of  the  nation's  industry ;  hence  the  truth  of  the 
general  statement  that  wages  are  labor's  portion  of 
the  national  product. 

While  the  assertion  that  all  capital  tends  to  yield 
but  one  rate  of  interest  is  substantially  correct,  a 
similar  affirmation  concerning  wages  would  be  mis- 
leading, or  rather,  untrue.  Competition  among 
laborers  is  not  nearly  so  immediate  nor  so  extensive 
as  among  the  owners  of  capital.  Locomotive  en- 
gineers have  no  fear  of  being  displaced  by  "section- 
hands."  The  world  of  labor  is  divided  into  a  series 
of  "non-competing"  groups  which  rise  one  above 
another,  from  the  lowest  grade  of  common  labor  to 
the  highest  form  of  special  ability  and  skill.  Within 
each  group  there  is  competition,  more  or  less  im- 
mediate and  unlimited ;  but  among  the  various 
groups  it  is  indirect  in  action  and  restricted  in  ex- 
tent. The  latter  kind  of  competition  is  maintained 
223 


A    LIVING    WAGE 

not  so  much  by  present  members  of  the  groups  as 
by  those  about  to  become  members.  Aside  from  the 
difficulty  of  moving  from  a  lower  to  a  higher 
group,  there  is  always  a  certain  influence  exerted 
by  inertia  and  custom  which  tends  to  compel  work- 
ers to  continue  at  their  present  tasks.  From  this 
influence  persons  who  have  not  yet  entered  any  par- 
ticular occupation  are,  of  course,  free.  Now  groups 
that  are  relatively  under-supplied,  in  which  wages 
are  consequently  high,  will  naturally  attract  a  great- 
er proportion  of  new  members  than  groups  that  are 
overcrowded.  And  if  all  the  persons  who  are  regular- 
ly called  upon  to  select  an  occupation  were  in  a  po- 
sition to  exercise  a  perfectly  free  choice,  the  different 
groups  would  be  in  unlimited  competition  with  one 
another  in  all  but  two  respects,  namely,  relative 
attractiveness  and  relative  cost  of  preparation  to 
enter  them.  Thus  occupations  of  equal  attractive- 
ness would  be  supplied  in  inverse  ratio  to  the  cost  of 
becoming  fitted  for  them,  while  occupations  stand- 
ing on  the  same  level  in  the  latter  respect  would  be 
filled  in  accordance  with  their  attractiveness.  Since 
the  more  pleasant  occupations  are  very  frequently 
the  ones  entailing  large  costs  of  preparation,  the  two 
kinds  of  inequality  would,  to  a  considerable  degree, 
balance  each  other.  Labor  would  not  flow  into  dis- 
agreeable occupations  more  rapidly  than  into  the 
opposite  kind  unless  the  training  cost  of  the  latter 
were  regarded  as  a  greater  evil  than  the  unattract- 
iveness  of  the  former.  In  the  long  run,  therefore, 
competition  among  the  different  groups  of  laborers 
would  be  limited  only  by  the  net  advantages  or  dis- 
224 


WAGES 

advantages  of  cost  of  preparation  as  against  dis- 
agreeableness  of  work.  As  a  matter  of  fact,  how- 
ever, the  majority  of  those  about  to  take  up  a  life 
work  cannot  choose  from  the  entire  field,  for  they 
have  not  the  financial  resources  required  to  make 
such  a  wide  choice  effective.  Despite  increased 
educational  and  other  opportunities,  the  greater? 
number  of  the  young  in  the  lower  walks  of  life  are 
under  the  practical  necessity  of  entering  one  of  the 
lower  groups  of  workers.  Competition  between  the 
lower  and  higher  groups  is,  therefore,  less  thorough 
than  it  would  be  if  a  larger  proportion  of  the  pro- 
spective workers  were  financially  able  to  fit  them- 
selves for  the  latter ;  and  the  apportionment  of  new 
arrivals  among  the  various  groups  is  not  made  sole- 
ly on  the  basis  of  a  balance  between  disagreeableness 
of  work  and  cost  of  preparation.  Taking  the  groups 
as  a  whole,  we  may  say  that  competition  among  them 
is  limited  by  unequal  attractiveness,  unequal  training 
cost,  and  unequal  opportunity  of  selection.^ 

It  is  to  be  noted  that  groups  are  distinguished 
from  one  another,  not  so  much  by  differences  of  in- 
dustry or  of  kinds  of  work,  as  by  differences  of 
working  power  and  skill.  The  group  known  as 
"common  laborers"  has  representatives  in  almost 
every  industry.  Digging  sewers  is  not  the  same 
kind  of  work  as  shoveling  coal,  yet  diggers  and 

^  The  classic  description  of  non-competing  groups  is  that 
given  by  J.  S.  Cairnes  in  "Some  Leading  Principles  of  Political 
Economy,"  pp.  65-73.  In  addition  to  the  three  forces  men- 
tioned above,  which  are  peculiar  to  the  world  of  labor,  the  gen- 
eral limitations  of  competition  are,  of  course,  operative  with 
regard  to  the  different  groups  of  laborers.  These  are  chiefly 
ignorance,  inertia,  immobility,  benevolence,  and  monopoly, 

IS  225 


A    LIVING    WAGE 

shovelers  belong  to  the  same  group  because  each 
can  do  the  work  performed  by  the  other.  The 
group,  therefore,  is  composed  on  the  basis  of  similar- 
ity in  the  working  efficiency  of  its  members, — its 
members  are  interchangeable. 

The  level,  and  movement,  and  laws  of  wages  may 
be  studied  both  in  the  single  group  and  with  refer- 
ence to  the  whole  of  the  laboring  class.  Let  us  con- 
sider first  the  single  group.  Here,  as  in  the  case  of 
all  other  commodities  that  are  bought  and  sold 
under  conditions  of  competition,  the  price  is  imme- 
diately regulated  by  the  forces  of  supply  and  de- 
mand. The  wages  of  any  group  of  laborers  will 
always  be  at  that  point  at  which  the  quantity  of 
labor  oflfered  is  equal  to  the  quantity  asked  for. 
Conversely,  at  any  existing  rate  of  wages,  supply  and 
demand  will  be  in  equilibrium.  The  equilibrium 
will  be  disturbed,  a  change  will  take  place  in  the 
rate  of  wages  only  in  consequence  of  a  change  in 
the  quantative  relations  of  demand  and  supply. 
When  the  quantity  of  labor  that  is  wanted  at  the 
current  rate  of  wages  increases  faster  than  the  sup- 
ply that  is  offered  at  this  rate,  the  change  will  be 
upward;  when  the  supply  outruns  demand  there 
will  be  a  variation  in  the  opposite  direction  and  wa- 
ges will  fall. 

The  remote  forces,  the  ultimate  causes,  that  de- 
termine the  movement  of  supply  and  demand  and 
the  rate  of  wages,  are  many  and  complex.  From 
the  side  of  supply  they  are  chiefly:  the  mobility  of 
labor,  that  is,  its  power  to  move  into  or  out  of  a 
group ;  custom,  the  tendency  of  which  in  some  occu- 
226 


WAGES 

patlons  is  to  continue  long  established  rates  of  re- 
muneration in  spite  of  changes  in  the  labor  supply; 
the  standard  of  living  of  the  laborers,  which  checks 
competition  and  counteracts  the  decline  in  wages 
that  otherwise  would  follow  an  increase  in  supply ; 
the  cost  of  subsistence  and  reproduction  in  the  case 
of  the  members  of  the  lowest  paid  groups;  labor 
organizations,  whose  effect  on  supply  is  similar  to 
that  produced  by  established  standards  of  living; 
the  birth  rate  and  the  rate  of  immigration  with 
reference  to  the  potential  supply  of  any  group ;  final- 
ly, the  productivity  of  labor,  that  is,  the  size  of  the 
product  turned  out  by  the  group  with  its  actual 
equipment  of  implements  and  machinery.  The 
principal  demand-factors  are:  competition  for  labor 
among  employers ;  activity  of  production,  or  the  gen- 
eral conditions  of  industrial  prosperity;  activity  of 
consumption  and  the  rate  of  saving,  which  are  merely 
important  elements  in  the  last  mentioned  factor; 
and  the  supply  of  land,  business  ability,  and  capital 
relatively  to  labor  supply.  All  of  these  factors  are 
to  some  extent  original  causes  of  the  rate  of  wages, 
and  each  of  them  is  assisted  and  counteracted  by 
one  or  more  of  the  others.  The  actual  wages  of  any 
group  are  a  resultant  of  their  inter-action. 

In  the  last  chapter,  the  rate  of  interest  was 
described  in  terms  of  the  productivity  of  capital: 
the  rate  of  wages  may  be  advantageously  compared 
with  the  productivity  of  labor,  more  precisely,  with 
its  marginal  productivity.  Let  us  assume  that  all 
the  members  of  a  group  are  equally  productive,  that 
they  all  contribute  equal  amounts  to  the  making  of 

227 


A    LIVING    WAGE 

their  combined  product.  The  disappearance  of  one 
from  the  group — the  positions  of  the  others  remain- 
ing unchanged — would  lessen  the  total  pioduct  in 
exactly  the  same  degree  as  the  disappearance  of  an- 
other. Since  all  are  equally  capable  and  perform 
equally  important  tasks,  they  will  turn  out  products 
of  equal  value,  and,  assuming  competition  to  be  per- 
fect, will  receive  equal  amounts  of  wages.  Now  it 
is  evident  that  the  sum  of  the  wages  paid  to  the 
group  cannot  exceed  the  value  of  the  total  product ; 
for  the  product  is  their  source.^  If  the  margin  be- 
tween the  total  wages  of  the  group  and  the  total 
value  of  its  product  is  unusually  wide,  and  if  all  the 
members  of  the  group  are  fully  employed  the  em- 
ployers will  strive  to  increase  their  product  by  en- 
ticing laborers  from  one  another.  As  a  result  of 
this  competition  for  labor,  wages  will  rise  until  the 
employers  have  only  enough  left  to  pay  rent  and  m- 
terest,  and  obtain  for  themselves  the  minimum  profit. 
In  case  all  the  members  of  the  group  are  not  fully 
employed,  the  employers  will  increase  the  total  labor 
force  and  product,  thus  depressing  the  price  of  the 
latter  and  raising  the  remuneration  of  the  former, 

^  The  product  is  obviously  not  the  source  from  which  is 
drawn  the  remuneration  of  those  groups  whose  product  (per- 
sonal services)  is  consumed  instead  of  being  sold  by  the 
employer.  Of  this  nature  are  some  of  the  professional  classes, 
for  example,  lawyers  and  physicians.  There  is,  however, 
scarcely  a  single  group  of  laborers — using  the  word  group  to 
comprise  all  who  are  interchangeable  in  working  efficiency,  and 
the  word  laborer  in  the  ordinary  sense — that  is  wholly  of  this 
kind.  Practically  all  of  them  are  composed  partly,  the  major- 
ity of  them  dominantly,  a  large  proportion  wholly,  of  persons 
whose  product  is  sold  by  their  employer,  in  other  words,  of 
industrial  workers.  Hence  it  may  be  safely  said  that  the 
wages  of  these  groups  are  regulated  by  the  product  of  the  in- 
dustrial members  of  the  group. 

228 


WAGES 

until  the  unusual  margin  of  profit  disappears.  Thus 
the  total  wages  paid  to  the  members  of  a  group  al- 
ways equals  the  selling  price  of  the  product,  minus 
rent,  interest,  and  normal  profits ;  and  since  all  le- 
ceive  the  same  remuneration  and  turn  out  the  same 
amount  of  product,  the  wage  of  each  may  be  said 
to  be  fixed  by  his  productivity. 

Usually,  however,  all  the  members  of  a  group  do 
not  produce  equal  quantities.  While  they  are  all 
equally  capable,  and  in  similar  conditions  would  be 
equally  productive,  they  are  not  all  in  a  position  fully 
to  utilize  their  capabilities.  Laborers  under  the  di- 
rection of  an  incompetent  employer,  and  those  work- 
ing with  poor  tools  or  machinery,  cannot  turn  out  as 
large  a  product  as  their  fellows  of  the  same  group 
who  are  more  advantageously  situated.  Yet  the 
amount  of  product  that  is  dependent  upon  any  man's 
presence,  the  amount  that  would  not  be  in  existence 
if  he  were  removed,  his  "associated  product,"  must 
have  a  value  at  least  equal  to  the  wage  that  he  re- 
ceives. The  laborer  whose  product  does  not  provide 
his  wage  is  not  a  profitable  investment,  and  cannot, 
on  business  grounds,  be  retained.  This  principle 
applies  to  even  the  least  productive  members  of  a 
group. 

On  the  other  hand,  the  wages  received  by  any 
member  of  a  group  will  not  fall  far  below  the  value 
of  the  product  of  its  least  productive  members ;  for 
an  employer  will  continue  to  add  laborers  to  his  force 
as  long  as  the  product  resulting  from  their  presence 
is  sufficient  to  provide  their  remuneration.  All  the 
employers  will  pursue  this  course  until  the  money 

229 


A    LIVING    WAGE 

return  from  the  product  that  is  associated  with  the 
activity  of  the  least  productive  or  least  important 
laborers  will  approximate  their  wages.  These  are 
the  "marginal"  members  of  the  group ;  their  produc- 
tive power  is  the  group's  "marginal"  productivity; 
and  the  product  dependent  on  their  presence  is  the 
"marginal"  product  of  the  group,  because  they  stand 
at  the  margin  of  profitable  employment.  Now  the 
wages  obtained  by  these  men  will  fix  the  remunera- 
tion of  all  the  other  members  of  the  group ;  for  they 
are  all  equally  capable.  What  one  man  can  do  every 
other  man  can  do.  In  the  actual  organization  of 
industry  some  are,  indeed,  less  productive  than  oth- 
ers, but  this  is  because  they  are  for  the  time  being 
engaged  in  less  important  tasks,  or  are  not  so  well 
provided  with  auxiliary  capital.  Any  one  of  them 
could,  if  called  upon,  take  the  place  of  any  one  of  the 
more  productive  workers.  Consequently  an  em- 
ployer will  pay  the  latter  no  more  than  the  former. 
Thus  the  mobility  of  laborers  of  the  same  group  has 
the  same  effect  on  their  wages  as  the  mobility  of  new 
capital  on  the  rate  of  interest.  Capital  that  is  loaned 
for  investment  in  highly  productive  instruments  can 
command  no  higher  interest  than  capital  that  goes 
into  the  least  productive  enterprises  because  other 
capital  stands  ready  to  take  its  place.  Laborers 
engaged  in  highly  productive  tasks  will  get  no  higher 
wages  than  their  equally  capable  fellows  in  the  least 
productive  employments  because  they  can  be  readily 
displaced  by  the  latter. 

Evidently  this  analysis  assumes  a  perfection  of 
competition  that  does  not  exist.    On  account  of  ig- 
230 


WAGES 

norance,  immobility,  or  failure  to  assert  themselves, 
some  members  of  the  group  are  paid  much  less  than 
the  value  of  the  group's  marginal  product.  On  the 
other  hand,  one  employer  will  often  pay  higher 
wages  than  another,  either  through  habit  or  for 
reasons  of  humanity  or  expediency,  or  because  his 
employees  are  strongly  organized,  or  owing  to 
ignorance  of  the  wages  prevailing  elsewhere  in  the 
same  group.  The  assumption  that  every  employer's 
business  is  of  such  a  nature  that  he  can  increase  the 
number  of  his  laborers  one  by  one  and  stop  at  the 
precise  point  where  an  additional  man  would  be 
unprofitable,  is  likewise  far  from  being  universally 
valid.  In  a  given  establishment  the  least  productive 
men  may  turn  out  a  product  that  is  worth  consider- 
ably more  than  their  wages,  but  the  circumstances 
of  the  business  may  be  such  that  no  addition  short 
of  five  men  will  be  practicable.  Now  the  product 
brought  into  being  by  the  five  may  be  less  in  value 
than  the  amount  of  wages  that  they  must  receive. 
In  that  case  new  men  will  not  be  employed,  and  the 
remuneration  of  the  least  productive  laborers  actu- 
ally at  work  will  not  approximate  the  selling  price 
of  their  product. 

Nevertheless  this  presentation  of  the  matter  cor- 
rectly describes  the  tendency  of  wages.  The  re- 
muneration of  all  the  members  of  a  group  of  equally 
capable  workers  will  tend  to  equal  that  of  its  least 
productive  members,  and  the  wages  of  the  latter  will 
tend  to  approximate  the  value  of  their  product. 

The  value,  not  the  amount  of  the  product,  it  must 
be  noted,  regulates  wages.     With  the  same  expendi- 

231 


A    LIVING    WAGE 

tore  of  skill  and  energ>-.  but  aided  by  better  tools  of 
inachmen%  the  laborers  of  a  group  may  turn  out 
double  the  amount  of  their  former  product:  yet  if 
the  price  of  the  product  has  fallen  in  the  meantime 
thcr  will  certainly  not  receive  twice  as  much  wages 
as  when  their  product  was  only  half  its  present  size. 
And  the  value  of  the  product  is  itself  determined  by 
the  condition  of  supply  and  demand,  which  is  in  turn 
governed,  as  we  have  seen  in  a  former  chapter,  by 
more  remote  forces.  WTiile,  therefore,  the  value  of 
the  product  is  a  convenient  measure  of  wages,  it 
is  not  an  ultimate  determining  factor. 

As  seen  in  the  last  chapter,  the  relation  between 
wages  and  interest  is  dependent  on  the  relation  be- 
tween the  supply  of  labor  and  the  supply  of  capital. 
Methods  of  production  remaining  the  same,  the 
wages  of  a  group  will  rise  relatively  to  interest  when 
the  capital  supply  of  the  group  increases  faster  than 
the  labor  supply.  WTien  productive  conditions 
change  in  such  a  way  that  labor  is  displaced  by  capi- 
tal, the  more  rapid  increase  of  the  latter  will  be 
partially  or  wholly  neutralized,  so  that  the  gain  of 
wages  relatively  to  the  rate  of  interest  will  be 
diminished  or  entirely  prevented. 

So  much  for  the  determinants  and  measures  of 
the  wages  of  any  group.  Concerning  wages  in  gen- 
eral, the  sum  total  of  remimeration  obtained  by  all 
the  groups  within  a  period  of  time,  it  may  be  said 
that  they  are  governed  immediately  by  supply  and 
demand,  ultimately  by  the  several  remote  forces 
that  regulate  group  wages.  To  say  that  general 
wages  are  measured  by  the  marginal  productivity"  of 
23^ 


WAGES 

the  least  productive  group  of  workers,  would  be 
obviously  unmeaning,  misleading  and,  indeed,  un- 
true; but  the  assertion  that  the  ratio  between  them 
and  the  rate  of  interest  depends  on  the  relation  be- 
tween increase  of  labor  and  increase  of  capital  con- 
veys an  important  truth.  Perhaps  the  most  fruitful 
single  proposition  that  can  be  laid  down  is  this:  in 
any  given  conditions  of  production  and  consump- 
tion, wages,  labor's  share  of  the  national  product, 
will  be  determined  by  the  ease  or  difficulty  of  in- 
creasing the  supply  of  labor  relatively  to  the  supply 
of  land,  business  ability,  and  capital.^ 

*  Cf.  Hobson,  "Ihe  Economics  of  Distribution,"  pp.  201-217. 
The  subject  of  wages  is  ably  treated  in  the  works  of  Nicholson, 
Clark,  Sidgwick,  Marshall,  Hadley,  and  Carver  which  have 
been  cited  in  the  chapters  immediately  preceding.  See  ?lso 
Walker,  "The  Wages'  Question"  ;  Levasseur,  "The  American 
Workman"  ;  Gunton,  "Wealth  and  Progress" ;  and  Smart,  "The 
Distribution  of  Income." 


933 


SECTION  IV 

THE  OBLIGATIONS 

CORRESPONDING 

TO  THE  RIGHT 


CHAPTER  XV 


The  Obligation  of  the  Employer 

Restatement  of  some  fundamental  conclusions.  The 
obligation  of  providing  the  laborer  with  a  Living  Wage 
falls  upon  the  employer  because  of  his  economic  position. 
Neither  labor  contracts  nor  the  productivity  of  labor  ars 
necessarily  correct  measures  of  justice.  The  employer  who 
cannot  pay  a  Living  Wage  is  not  bound  to  do  so,  but  the 
laborer's  right  to  a  decent  livelihood  is  superior  to  the  em- 
ployer's right  to  enjoy  goods  that  are  superfluous  to  his 
social  position.  The  employer  is  obliged  to  pay  a  Living 
Wage  before  he  obtains  interest  on  his  invested  capital. 
The  productivity  of  capital  and  the  sacrifice  of  saving  are 
to  some  extent  valid  titles  of  interest,  but  they  are  inferior 
to  the  title  of  needs.  A  corporation  is  under  obligation 
to  pay  a  Living  Wage  at  the  expense  of  dividends. 

Three  of  the  more  important  conckisions  arrived 
at  in  preceding  chapters  may  with  advantage  be  re- 
stated. First,  the  laborer's  right  to  a  Living  Wage 
is  merely  the  concrete  expression  of  the  general 
right,  which  inheres  in  him  as  in  all  other  men,  to 
obtain  on  reasonable  terms  as  much  of  the  common 
bounty  of  nature  as  will  enable  him  to  live  decently. 
Those  who  reject  this  general  right  are  logically 
compelled  to  reject  the  intrinsic  worth  and  sacred- 
ness  of  personality,  to  deny  the  reality  of  moral 
rights,  and  to  maintain  that  the  only  determinants 

237 


A    LIVING    WAGE 

of  property  titles  are  the  potency  of  physical  force 
and  the  ordinances  of  the  civil  law.  Those  who 
admit  the  validity  of  the  general  right  will  logically 
conclude  that  in  the  laborer  it  becomes  the  right  to 
a  Living  Wage  because,  in  the  present  economic 
and  political  order,  there  is  no  other  reasonable  way 
by  which  it  can  obtain  a  concrete  existence.  Sec- 
ond, the  corresponding  obligation  falls  upon  "the 
members  of  the  industrial  community  in  which  the 
laborer  lives,"  since  they  are  the  primary  benefici- 
aries of  the  laborer's  exertion  and  the  only  persons 
who  can  reasonably  be  expected  to  remunerate  him. 
The  members  of  other  communities  than  that  in 
which  a  given  laborer  lives  have  not  the  control  over 
his  product  that  would  enable  them  to  pay  wages 
therefrom ;  besides,  they  are  under  obligations  toward 
their  own  neighbors  who  are  wage  earners.  Any 
reasonable  determination  of  the  duties  that  have  to 
do  with  the  resources  and  opportunities  of  the  earth 
will  hold  each  community  responsible  for  the  realiza- 
tion of  the  wage-rights  of  its  own  members.  Final- 
ly, the  existing  distributive  system,  which  by  means 
of  certain  psychical,  economic,  and  social  forces, 
apportions  the  national  product  among  the  owners 
of  land,  business  ability,  capital,  and  labor,  deter- 
mines the  particular  classes  of  persons  upon  whom 
the  obligation  rests,  and  sets  certain  limits  to  their 
power  to  discharge  it. 

Just  as  the  obligation  to  provide  particular  labor- 
ers with  a  Living  Wage  holds  in  general  against 
their  own  community,  rather  than  other  communi- 
ties ;  so  it  binds  specifically  the  employer,  rather  than 
238 


OBLIGATION    OF    THE    EMPLOYER 

other  economic  classes  of  his  community.  All  class- 
es, landowners,  employers,  capitalists,  and  laborers, 
are  obliged  to  refrain  from  unreasonably  hindering 
the  gaining  of  a  decent  livelihood  by  their  fellow 
men;  but  the  refusal  of  landowners  and  capitalists 
to  pay  a  Living  Wage  to  laborers  who  are  not  in 
their  employ  cannot  fairly  be  regarded  as  an  unrea- 
sonable hindrance.  Since  they  do  not  own  the 
laborer's  product,  they  are  not  in  control  of  the 
source  from  which,  under  the  wage-system,  labor  is 
remunerated.  But  the  economic  position  of  the 
employer  is  such  that  the  obligation  falls  naturally 
and  reasonably  upon  his  shoulders.  In  the  case  of 
industrial  labor,  he  gets  possession  of  and  sells  the 
product;  in  the  case  of  personal  services  that  are 
utilized  solely  by  him,  the  obligation  is  still  more 
clearly  his,  inasmuch  as  he  is  the  only  beneficiary  of 
the  laborer's  exertions.  To  shift  the  wage-paying 
obligation,  or  any  portion  of  it,  to  other  classes  would 
involve  an  essential  change  in  the  present  industrial 
system.  The  distribution  of  duties  that  would  be 
necessitated  by  vital  changes  does  not  concern  us ; 
we  are  dealing  with  the  obligations  that  arise  out  of 
the  order  now  existing.  Among  all  the  economic 
classes  of  the  community,  therefore,  the  employer 
is  primarily  charged  with  the  obligation  of  provid- 
ing the  laborer  with  a  Living  Wage  because  this  is  a 
reasonable  consequence  of  his  position  and  function 
in  the  economic  organism.  His  refusal  to  fulfil  it 
can  fairly  be  interpreted  as  an  unreasonable  inter- 
ference with  the  laborer's  right  to  get  a  decent  liv- 
ing from  the  resources  of  the  earth. 

239 


A    LIVING    WAGE 

Another  method  of  describing  the  employer's 
obligation  turns  upon  the  human  dignity  of  the 
laborer  as  an  essential  element  of  the  wage-contract. 
The  employer  is  bound  to  compensate  the  human 
exertion  that  he  buys  at  its  ethical  value.  He  should 
deal  with  it  as  the  attribute,  the  output,  of  a  person, 
of  a  rational  creature  who  is  endowed  with  an  inde- 
structible right  to  live  a  decent  human  life.  This 
aspect  of  the  thing  that  he  buys  ought  to  receive 
explicit  recognition  in  the  contract ;  that  is,  the  con- 
tract should  be  made  on  such  terms  that  the  dignity 
of  the  laborer  and  his  right  to  a  decent  livelihood 
will  be  safeguarded. 

According  to  a  third  view,  the  wage-paying  func- 
tion is  a  social  one,  delegated  by  society  to  the  em- 
ployer. Society,  or  the  community,  owes  its  labor 
members  a  Living  Wage  in  return  for  their  social 
services  as  workers,  but  it  has  transferred  the  obli- 
gation to  a  special  agency.  The  distributive  func- 
tion of  the  industrial  organism  has  been  specialized. 
True,  society  has  not,  either  in  its  political  or  indus- 
trial capacity,  explicitly  commanded  the  employer  to 
pay  a  Living  Wage,  but  this  negligence  does  not  re- 
lease him  from  a  duty  that  arises  out  of  the  very 
nature  of  the  function  that  he  has  undertaken  to 
perform.  He  accepts  the  task  of  social  paymaster, 
and  is  morally  bound  to  discharge  it  in  accordance 
with  the  dictates  of  reason  and  justice. 

Finally,  the  employer's  obligation  may  be  stated 

in  terms  of  social  utility.     As  a  social  functionary 

he  ought  to  perform  his  task  in  a  manner  consistent 

with  social  safety.     Consequently,  he  is  obliged  to 

240 


OBLIGATION    OF    THE    EMPLOYER 

give  his  employees  a  wage  that  will  enable  them  to 
live  decently,  to  marry,  and  to  bring  up  a  family  in 
conditions  of  reasonable  comfort  and  security ;  for 
when  any  considerable  section  of  its  members  fails 
to  reach  this  level,  the  security  and  the  existence 
even  of  society  is  endangered. 

The  last  argument  considers  the  worker's  rights 
and  interests  as  mere  means  to  social  well  being. 
The  second  and  third  are  fundamentally  the  same 
as  the  first,  since  they  assume  that  the  obligation  to 
safeguard  the  laborer's  right  to  a  decent  livelihood, 
and  to  discharge  this  one  of  society's  responsibilities 
toward  him,  is  a  necessary  corollary  of  the  employ- 
er's economic  position.  The  last  word  of  the  ethical 
argument,  therefore,  is  the  reasonableness  of  assign- 
ing the  duty  of  providing  the  laborer  with  a  Living 
Wage  to  the  employer,  rather  than  to  any  other 
economic  or  social  agency.  If  it  be  objected  that 
this  principle  is  too  indefinite,  the  answer  must  be, 
none  of  the  recognized  titles  of  ownership  rests  on 
a  more  definite  or  more  urgent  basis.  What  justi- 
fication exists  for  John  Brown's  claim  to  the  land 
that  he  has  been  the  first  to  occupy  ?  or  has  bought  ? 
or  inherited?  or  to  the  crop  that  he  has  produced 
therefrom  ?  And  why  should  other  men  be  denounced 
as  unjust  when  they  prevent  him  from  enjoying 
these  claims  ?  In  other  words,  why  are  these  morally 
legitimate  titles  of  property  ?  No  final  answer  can  be 
given  except  that  they  are  reasonable  methods  of 
distributing  the  common  heritage  of  nature,  of  de- 
termining and  concreting  the  general  rights  and  ob- 
ligations of  men  with  regard  to  the  common  bounty 

i6  241 


A    LIVING    WAGE 

of  the  earth.  Under  the  wage-system  the  payment 
of  a  Living  Wage  by  the  employer  is  an  equally  rea- 
sonable method  of  concreting  the  laborer's  general 
right  to  a  decent  livelihood.  And  the  obligation 
binding  the  employer  to  perform  this  function  is 
just  as  reasonable  and  valid  as  the  obligation  which 
constrains  men  to  respect  the  traditional  titles  of 
ownership. 

Men  who  deny  that  the  employer  is  under  this 
obligation  may  be  comprised  in  two  general  classes : 
first,  those  who  maintain  that  the  terms  of  the  labor 
contract  constitute  the  sole  measure  of  rights  and 
duties ;  and,  second,  those  who  assert  that  the  labor- 
er's productivity  determines  his  valid  claims  in  the 
matter  of  wages.  To  the  former  contention  we  can 
only  answer  that  every  free  contract  is  not  necessar- 
ily just.  An  agreement  to  rob  or  kill  for  a  price  is 
legitimate  neither  in  morals  nor  in  law.  The  man 
who  consents  to  pay  blackmail  rather  than  suffer 
injury  to  his  reputation  enters  a  free  contract,  yet 
the  other  party  to  the  contract  is  guilty  of  an  act  of 
injustice.  When  a  body  of  consumers  is  forced  to 
pay  an  extortionate  price  for  a  monopolized  com- 
modity, they  are  given  the  benefit  of  free  contracts, 
which  nevertheless  all  reasonable  men  pronounce 
unfair.  Those  in  control  of  the  monopoly  are  con- 
demned as  unjust  because  they  take  an  undue  ad- 
vantage of  the  necessities  of  their  fellows.  Now  the 
employer  who  makes  use  of  the  dire  need  of  the 
laborer  in  order  to  force  him  into  a  wage-contract 
that  is  incompatible  with  reasonable  living,  commits 
precisely  the  same  offense;  for  it  cannot  be  main- 

242 


OBLIGATION     OF    THE     EMPLOYER 

tained  that  the  laborer  is  free  to  reject  the  terms 
offered  and  get  his  Hving  in  some  other  way.  No 
such  alternative  exists  practically.  Individual  work- 
ingmen  may  change  their  abode  and  their  employ- 
ment, but  other  individuals  must  take  their  place. 
The  class  remains.  While  the  present  industrial 
system  exists  every  community  must  contain  a  body 
of  laborers  and  a  body  of  employers.  And  the  mem- 
bers of  both  groups  depend  upon  labor  contracts  for 
their  livelihood.  Hence,  these  contracts  ought  to 
be  made  in  such  a  way  that  the  natural  rights  of  the 
participants  to  a  decent  living  will  be  provided  for 
and  safeguarded.  This  is  a  moral  limitation  im- 
posed upon  the  wage-contract  by  the  very  nature 
of  existing  industrial  institutions. 

The  contention  that  the  laborer  ought  to  be  re- 
warded according  to  his  productivity,  may  mean 
three  different  things.  Productivity  may  be  inter- 
preted as  the  value  of  the  product  that  comes  into 
being  as  the  result  of  the  activity  of  any  particular 
laborer;  as  the  productive  power  of  one  worker 
relatively  to  that  of  another;  or,  as  the  productive 
importance  of  labor  in  comparison  with  the  other 
factors  of  production.  Let  us  examine  each  inter- 
pretation separately. 

If  the  value  of  the  laborer's  product  be  taken  as 
the  just  measure  of  his  remuneration,  he  ought  to, 
as  in  fact  he  usually  does,  receive  an  increase  of  wa- 
ges when  his  product  sells  for  a  higher  price.  Yet  he 
works  no  harder  than  before,  turns  out  no  more  pro- 
duct than  before.  His  additional  compensation  bears 
no  relation  whatever  to  any  quality  or  achievement, 
243 


A    LIVING    WAGE 

physical  or  moral,  of  the  laborer  himself.  Now  a 
theory  of  justice  that  measures  a  man's  desert,  his 
rights,  by  conditions  for  which  he  is  in  no  wise 
responsible,  and  which  takes  no  account  of  his  hu- 
man dignity,  stands  refuted  as  soon  as  it  is  stated. 
It  may  be  a  canon  of  expediency ;  it  is  certainly  noc 
a  canon  of  justice.  If,  however,  it  be  maintained 
that  there  is  no  obligation  to  pay  the  laborer  more 
than  the  value  of  his  product  because  there  is  no 
possibility  of  doing  so,  no  objection  can  be  offered; 
but  this  is  merely  a  practical  conclusion  that  would 
follow  from  any  theory  of  industrial  justice  that 
might  be  adopted.  It  is  consistent  with  the  Living 
Wage  principle,  and  with  the  assertion  that  the 
laborer  ought  not  to  be  paid  the  value  of  his  product. 
The  argument  from  productivity  in  the  second 
sense  assumes  that  one  man  is  paid  more  than  an- 
other because  he  produces  more,  and  contends  that 
higher  productive  achievement  is  a  valid  reason  for 
higher  remuneration.  But  in  most  cases  it  is  utter- 
ly impossible  to  measure  the  relative  productivity  of 
different  classes  of  workers.  Does  the  bookkeeper 
in  the  cotton  factory  produce  more  than  the  spinner  ? 
Or  the  locomotive  engineer  more  than  the  "section- 
hand  ?"  In  the  factory  as  on  the  railway,  both  class- 
es of  workers  are  essential  to  the  existence  of  the 
product,  and  their  productive  efforts  have  an  organic 
character.  One  could  not  function  successfully 
without  the  other,  and  there  is  no  portion  of  the 
finished  product  to  which  both  have  not  in  some 
measure  contributed.  Each  is  in  his  own  order  a 
cause  of  the  whole  product.     Consequently,  no  part 

244 


OBLIGATION    OF    THE    EMPLOYER 

of  it  can  be  set  apart  as  the  exclusive  creation  of 
either.  We  cannot  say  that  the  bookkeeper  gets 
more  than  the  spinner  because  he  produces  more, 
for  we  do  not  and  cannot  know  whether  the  assump. 
tion  be  correct.  The  difficulty  is  the  same  when  we 
consider  laborers  in  different  industries.  Do  the 
skilled  workers  in  an  automobile  factory  produce 
more  than  the  common  laborers  who  pave  streets? 
There  is  no  third  term  by  which  the  two  products 
can  as  such  be  compared.  A  basis  of  comparison 
might  be  found  in  their  relative  general  utility  to 
society,  but  this  is  not,  strictly  speaking,  a  test  of 
productivity.  Besides,  it  would  dictate  that  the 
street  laborers  ought  to  receive  higher  wages  than 
the  automobile  makers.  The  relative  productivity 
of  different  workers  can  be  ascertained  only  in  those 
cases  in  which  all  the  conditions  of  work  are  pre- 
cisely alike,  when,  for  example,  men  use  the  same 
kind  of  tools  or  machines.  We  can  readily  com- 
pare the  products  of  two  coal-heavers  who  are 
equipped  with  shovels  of  the  same  size,  or  of  two 
operators  who  use  the  same  kind  of  sewing  machine, 
or  of  two  bricklayers  who  work  in  equally  advan- 
tageous circumstances.  When,  however,  the  work- 
ing conditions  vary,  and  especially  when  every  por- 
tion of  the  product  requires  the  activity  of  all  the 
producers  whom  we  wish  to  compare,  we  cannot  tell 
to  what  extent  one  man  is  more  productive  than  an- 
other. As  a  matter  of  fact,  different  kinds  of  labor 
are  rewarded  differently  on  account  of  differences 
in  the   conditions  of  supply  and   demand.     Wqrt: 

245 


A    LIVING    WAGE 

bookkeepers    as    plentiful,    relatively,    as   spinners 
their  remuneration  would  be  as  low. 

The  third  interpretation  of  productivity  as  a  meas- 
ure of  industrial  desert  holds  that  labor,  and  conse- 
quently any  particular  group  of  laborers,  is  at  present 
rewarded  in  conformity  with  its  importance  rela- 
tively to  the  other  productive  agents.  The  conten- 
tion is  evidently  true  if  "productive  importance"  be 
taken  to  mean  relative  scarcity  in  the  actual  circum- 
stances of  industry,  for  this  is  only  another  way  of 
saying  that  labor's  share  of  the  product  is  fixed  by 
the  laws  of  supply  and  demand.  When,  as  usuallv 
happens,  this  phrase  is  employed  to  describe  in  some 
vague  way  the  relation  of  causality  existing  between 
labor  and  the  product,  the  theory  is  as  impossible 
of  verification  as  the  less  ambiguous  assertion  that 
labor  is  remunerated  according  to  the  portion  of  the 
product  that  it  creates  in  conjunction  with  the  other 
factors.  As  we  cannot  determine  how  much  of  the 
joint  product  is  due  to  each  factor,  so  we  cannot 
measure  their  relative  importance  in  the  work  of  pro- 
duction. The  productive  importance  of  the  employ- 
er is  sometimes  assumed  to  be  indicated  by  the  share 
of  the  product  that  he  actually  receives,  but  this  in- 
ference from  income  to  productivity  is  merely  an 
ordinary  instance  of  the  logical  fallacy  known  as 
"the  vicious  circle."  ^  "What  determines  the  em- 
ployer's remuneration?"  "His  productive  impor- 
tance." "How  can  the  latter  be  ascertained?"  "By 
referring  to  his  remuneration."  Those  who  take 
the  trouble  to  get  behind  formulas,  and  to  examine 

*Cf.  "The  Social  Problem,"  by  John  A.  Hobson,  p.  160. 
246 


OBLIGATION    OF    THE    EMPLOYER 

the  actual  working  of  industrial  forces,  realize  that 
the  income  of  any  factor  depends  upon  its  "indis- 
pensableness"  and  not  on  any  proportion  to  its  pro- 
ductive efficiency.  ^  When  undertaking  ability  was 
less  plentiful  than  it  is  now,  employers  in  competitive 
enterprises  received  larger  rewards ;  therefore,  their 
productive  importance  was  either  exceeded  by  their 
former  profits  or  is  at  present  inadequately  remun- 
erated. Undoubtedly  the  employer  is  in  most  cases 
a  more  important  productive  factor  than  any  single 
laborer,  as  is  easily  shown  by  comparing  the  respect- 
ive consequences  of  their  withdrawal  from  an  enter- 
prise. The  productive  importance  of  different  em- 
ployers can  likewise  be  partially  measured  by  re- 
ferring to  the  different  results  that  are  obtained 
when  they  direct  production  with  the  same  quantities 
and  qualities  of  land,  capital,  and  labor.  But  it  is 
not  possible  to  estimate  the  productive  importance 
of  any  employer,  efficient  or  inefficient,  relatively  to 
the  productive  importance  of  the  entire  labor  force 
under  his  direction.  Mr.  Mallock  has  made  an  in- 
genious attempt  to  show  that  by  far  the  greater  part 
of  the  product  of  modern  industry  is  due  to  mental 
ability  (or  simply  Ability,  as  he  writes  it,)  and  that 
labor  gets  more  instead  of  less  than  it  produces ;  but 
he  cannot  be  said  to  have  conspicuously  succeeded. 
He  ignores  almost  entirely  the  advances  in  skill  made 
by  labor  during  the  last  century,  and  the  vast  differ- 
ences of  directive  ability  required  and  displayed  in 
different  industrial  enterprises ;  "ascribes"  a  certain 
portion  of  the  product  to  labor,  and  says  that  labor 

^  Cf.  Smart,  "The  Distribution  of  Income,"  pp.  237,  238. 
247 


A    LIVING    WAGE 

must  be  "held  to  produce  so  much,"  when  the  ques- 
tion, in  so  far  as  it  has  any  ethical  interest,  is  one 
of  objective  fact,  not  of  practical  expediency;  and 
exaggerates  the  mental  endowments  of  inventors, 
and  does  not  sufficiently  distinguish  between  their 
achievements  and  those  of  the  employing  class.  ^ 

Even  if  the  claim  that  labor  is  at  present  rewarded 
in  proportion  to  its  productivity — in  any  sense  of 
which  the  term  is  susceptible — were  irrefutably  es- 
tablished, the  conclusion  that  labor  is  justly  remun- 
erated would  not  follow.  "We  might  raise  the  ques- 
tion, whether  a  rule  that  gives  to  each  man  his  prod- 
uct is,  in  the  highest  sense,  just."  ^  The  question 
must  be  answered  in  the  negative.  While  a  man 
has  an  indisputable  right  to  all  the  utilities  that  he 
creates  with  the  aid  of  his  own  materials  and  with- 
out assistance  from  other  men,  his  claim  to  be  re- 
warded in  proportion  to  his  activity  is  by  no  means 
so  clear  when  there  is  question  of  a  joint  product. 
In  the  latter  case  productivity  would  seem  to  be  the 
lowest  of  all  the  titles  of  ownership.  It  is  inferior 
to  eftort.  Of  two  men  who  contribute  to  the  crea- 
tion of  a  common  product  and  who  have  made  equal 
efforts  and  sacrifices,  why  should  the  stronger,  or 
more  skilfull  or  more  intelligent  receive  a  greater 
recompense  than  his  less  efficient  fellow?  The  latter 
has  done  his  best,  the  former  can  say  no  more.  It 
is  not  denied  that  achievement  ought  to  be  considered 

^  See  his  "Labor  and  the  Popular  Welfare,"  passim ;  and 
"Aristocracy  and  Evolution,"  Book  III,  ch.  I.  He  has  been 
effectively  answered  by  Mr.  Hobson  in  the  "Contemporary 
Review,"  August,   1898. 

*  Clark,  "The  Distribution  of  Wealth,"  p.  8. 

248 


OBLIGATION    OF    THE    EMPLOYER 

to  some  extent  in  apportioning  a  reward  among  co- 
operators,  but  it  is  maintained  that  our  native  sense 
of  justice  always  dictates  that  the  distribution 
should  be  made  in  accordance  with  individual  merit, 
good  will,  self-sacrifice,  conditions  that  are  within 
the  control  of  the  workers,  rather  than  aptitudes 
and  qualities  for  which  they  are  not  personally 
responsible.  This  is  certainly  the  standard  by  which 
we  hope  to  be  judged  in  the  Life  Beyond.  Measured 
by  the  rule  of  efforts  and  sacrifices,  the  laborer,  gen- 
erally speaking,  has  as  large  a  claim  to  remuneration 
as  the  landowner,  the  employer,  or  the  capitalist. 
Again,  the  title  of  productivity  must  give  way  to 
that  of  needs,  which  is  the  end  to  which  all  other 
titles  are  but  means.  The  primary  reason  why  men 
should  own  property  of  any  kind  is  to  be  found  in 
their  wants.  By  these  must  all  other  claims  to 
ownership  be  determined  and  conditioned.  Since 
all  men  are  equal  as  persons,  the  essential  needs  of 
personality  are  of  equal  moral  validity  in  all.  Hence, 
the  person's  right  to  the  minimum  of  goods  necessary 
to  satisfy  these  fundamental  needs  is  superior  to  any 
of  the  merely  secondary  claims. 

When  the  employer  cannot  pay  a  Living  Wage  he 
is  for  the  time  being  freed  from  actual  obligation, 
as  no  one  is  morally  bound  to  do  the  impossible. 
The  contention  that  such  a  man  ought  to  cease  to  be 
an  employer  will  scarcely  hold  in  the  face  of  the 
hardship  that  he  would  thus  undergo.  A  man's 
fundamental  right  to  get  a  living  on  reasonable 
terms  carries  with  it  some  kind  of  claim  to  remain 
in  the  economic  position  in  which  he  has  become 

249 


A    LIVING    WAGE 

established;  and  this  claim  will  cease  to  exist  only 
in  the  presence  of  grave  contrary  reasons.  On  the 
other  hand,  the  inability  of  one  or  many  employers 
to  discharge  the  obligation  will  not  free  those  who 
are  better  situated.  The  prosperous  employer  can- 
not exculpate  himself  on  the  ground  that  he  is  pay- 
ing as  high  wages  as  his  neighbors.  * 

"Cannot  pay  a  Living  Wage"  is,  however,  ex- 
tremely vague.  To  one  it  may  mean  that  if  he  does 
so  he  will  be  unable  to  increase  his  personal  expendi- 
tures, or  better  his  social  position ;  to  another,  that 
the  profits  remaining  will  not  be  a  fair  remunera- 
tion for  his  skill,  energy,  and  directive  ability;  to  a 
third,  that  he  will  have  nothing  left  with  which  to 
extend  his  business  or  make  new  investments;  to  a 
fourth,  that  he  will  not  receive  a  fair  rate  of  interest 
on  his  capital.  The  first  three  of  these  interpreta- 
tions are  morally  invalid  because  they  imply  a  sub- 
ordination of  the  essential  needs  of  the  laborer  to  the 
non-essential  needs  of  the  employer.  All  the  ends 
that  the  employer  seeks  to  realize  in  these  three  ways 
lead  ultimately  to  the  satisfaction  of  wants  that  are 
superfluous  relatively  to  his  present  standard  of  liv- 
ing. Now  employer  and  employee  are  equal  in  per- 
sonal dignity,  and  their  essential  needs  are  of  equal 
worth  and  moral  importance.  Consequently  the 
essential  needs  of  one  are  morally  superior  to  the 
accidental  needs  of  the  other.  The  laborer's  need 
of  the  requisites  of  a  decent  and  reasonable  life  is 
more  important  in  the  moral  order  than  the  employ- 
er's need  of  life's  conveniences  and  superfluities.  If 

^  Cf.  Verineersch,  "Quaestiones  de  Justitia,"  pp.  579,  580. 
250 


OBLIGATION     OF     THE    EMPLOYER 

the  individual's  obligation  to  use  and  distribute  the 
resources  of  the  earth  consistently  with  the  rights 
of  his  neighbors  thereto  is  more  than  a  vague  and 
empty  formula,  it  surely  means  in  the  concrete  that 
the  employer  is  bound  to  distribute  the  product  of 
industry  and  his  personal  income  in  such  a  way  that 
his  own  secondary  and  unimportant  wants  shall  not 
be  preferred  to  the  primary  and  vital  needs  of  those 
who  expend  all  their  working  time  and  energy  under 
his  direction  and  for  his  benefit. 

The  industrial  employer,  the  employer  of  men 
who  produce  for  the  market,  has  obviously  a  right 
to  get  a  decent  livelihood  from  his  business.  And 
this  means  not  merely  goods  absolutely  necessary 
for  right  living,  but  also  conventional  necessities. 
Since  the  latter  vary  according  to  a  man's  station — 
the  position  that  he  holds  socially  and  economically, 
and  the  scale  of  personal  and  family  expenditure  to 
which  he  has  become  accustomed, — a  decent  living 
for  the  employer  will,  as  a  rule,  include  more  of  the 
good  things  of  life  than  in  the  case  of  the  laborer. 
In  both  cases  it  corresponds  with  the  standard  of 
life  peculiar  to  the  class.  The  absolute  necessaries 
of  life  are  approximately  the  same  for  employer  and 
employee,  namely,  a  reasonable  minimum  of  food, 
clothing,  shelter,  education,  and  recreation;  their 
conventional  necessaries  differ  on  account  of  the 
different  ways  of  living  to  which  they  have  become 
accustomed,  and  which  they  have  come  to  regard 
as  essential.  Undoubtedly  the  employer  would  suf- 
fer a  slighter  hardship  if  his  expenditure  for  things 
conventionally  necessary  were  diminished  by,  say, 

251 


A    LIVING    WAGE 

ten  per  cent.,  than  would  the  laborer  whose  outlay 
for  his  conventional  needs  was  curtailed  in  the  same 
degree ;  yet  the  general  statement  remains  true,  that 
the  loss  of  conventional  necessities  entails  suffering 
upon  both.  Hence  the  rule  above  laid  down  does 
no  injustice  to  the  laborer,  since  it  merely  treats 
laborer  and  employer  unequally  in  so  far  as  they  are 
unequal,  that  is,  in  regard  to  their  habits  of  living, 
but  treats  them  equally  with  reference  to  inconve- 
niences that  affect  them  equally.  It  is  altogether  just 
that  the  employer  should  retain  a  sufficient  amount 
of  the  proceeds  of  his  business  to  maintain  himself 
and  family  in  reasonable  conformity  with  the  stand- 
ard of  living  that  he  has  come  to  look  upon  as  proper 
to  his  station.  Until  he  has  paid  all  his  employees 
a  Living  Wage  he  ought  to  refrain  from  all  costly 
expenditure  for  the  purpose  of  amusement  and  re- 
creation, and  in  general  from  everything  that  comes 
under  the  head  of  luxurious  living.  The  term  lux- 
ury is,  indeed,  very  vague  and  very  relative.  No 
general  rule  can  be  framed  that  will  distinguish 
sharply  between  luxuries  and  conventional  necessi- 
ties. Again,  the  different  social  classes  in  American 
life  merge  into  one  another  by  insensible  grada- 
tions, so  that  men  frequently  regard  the  grade  just 
above  them  rather  than  the  one  in  which  they  actual- 
ly live,  as  the  standard  to  which  their  expenditures 
ought  to  conform.  And  yet,  some  general  observa- 
tions may  be  made  which  are  sound  and  helpful. 
The  employer  who  cannot  at  the  same  time  pay  a 
Living  Wage  to  all  his  employees  and  live  in  his 
customary  manner,  ought  not  to  go  beyond  the 
252 


OBLIGATION    OF    THE    EMPLOYER 

moderate  satisfaction  of  the  physical,  intellectual, 
moral,  and  spiritual  wants  of  himself  and  his  family. 
He  ought  to  avoid  all  lavish  feasting,  all  extrava- 
gant forms  of  amusement,  and  all  ostentation  in 
dress,  equipage,  and  household  appointments.  His 
right  to  satisfy  any  of  these  wants  yields  to  the  right 
of  his  employees  to  the  conditions  of  a  decent  liveli- 
hood. 

The  claim  of  the  employer  to  a  fair  rate  of  interest 
on  his  capital  at  the  cost  of  a  Living  Wage  for  the 
laborers  in  his  employ,  likewise  puts  his  non-essen- 
tial needs  above  the  essential  needs  of  the  latter,  and 
is  consequently  unsound.  The  right  of  capital  to 
obtain  interest  is  sometimes  asserted  in  such  a  way 
as  to  indicate  a  belief  that  this  is  the  supreme  right 
in  the  field  of  distribution.  Capital  is  personified. 
There  should  be  no  need  to  insist  that  capital  is  not  a 
moral  and  rational  being,  and  can  have  no  moral 
claim  to  a  share  in  the  product.  It  is  a  condition  of 
production,  but  not  a  producer  in  the  same  sense  as 
the  laborer  and  employer,  nor  has  it  any  moral  and 
rational  needs  to  be  supplied  out  of  the  results  of  pro- 
duction. Its  claim  to  a  portion  of  the  product  must  be 
made  on  behalf  of  its  owner  and  in  terms  of  his 
rights.  Now  the  only  titles  that  justify  the  receipt  of 
interest  by  the  capitalist  are  these  two :  the  produc- 
tivity of  capital,  and  the  sacrifice  involved  in  ac- 
cumulating instead  of  spending  income. 

The   formula,  res  fructiiicat  domino    ("a  thing 

fructifies   to   its   owner")    unquestionably   states   a 

general  truth,  but  it  must  be  dififerently  interpreted 

with  regard  to  different  kinds  of  property.     A  man 

253 


A    LIVING    WAGE 

who,  unaided  by  others,  uses  his  own  land,  raw  ma- 
terial, tools,  and  machinery  to  bring  into  existence 
a  product,  say,  wheat  or  shoes,  has  a  right  to  the 
whole  of  that  product,  including  the  share  of  it  that 
represents  the  productive  action  of  capital.  In  such 
cases  the  owner's  claim  to  the  fruits  of  his  property 
is  unconditionally  valid.  The  utility  produced  by  a 
rented  dwelling  goes  to  the  occupier  immediately, 
but  redounds  to  the  proprietor  in  the  form  of  rent. 
The  latter  gets  the  product  of  his  property,  inasmuch 
as  he  is  paid  what  is  regarded  as  the  product's  value. 
To  him  this  virtual  fruit  rightfully  belongs,  as  there 
is  no  one  else  who  can  establish  a  shadow  of  counter- 
claim. When  a  field  or  a  building  that  is  used  for 
commercial  or  industrial  purposes,  is  hired  out,  its 
fruits  become  merged  in  the  general  product  and  are 
indistinguishable  therefrom.  They  are,  however, 
assumed  to  be  adequately  represented  by  the  price 
that  is  paid  for  the  use  of  their  material  cause.  Here, 
again,  the  owner  reaps  the  virtual  fruit  of  his  prop- 
erty. Similarly  the  interest  that  a  man  receives  on 
money  he  has  loaned  to  a  business  man,  for  example, 
a  manufacturer,  is  regarded  as  the  equivalent  of  the 
product  of  the  material  capital  into  which  the  loaned 
money  has  been  converted.  The  owner  of  the  money 
receives  the  fruit  of  his  virtually  productive  proper- 
ty in  the  shape  of  interest.  Whether  these  m.ethods 
of  measuring  the  product,  according  to  which  it  is 
valued  in  terms  of  rent  and  interest,  ever  represent 
the  precise  physical  contribution  made  by  land  and 
capital  to  the  combined  product,  cannot  be  known ; 
but  they  are  the  only  methods  that  are  practicable. 

254 


OBLIGATION    OF    THE    EMPLOYER 

Now  the  right  of  the  money  lender  to  take  this  equiv- 
alent of  the  fruit  of  his  money  is  just  as  valid  as  the 
corresponding  right  in  the  owner  of  the  field,  the 
owner  of  the  building,  or  the  owner  of  capital  instru- 
ments. All  of  these  claims  are  essentially  the  same, 
namely,  the  claim  asserted  by  the  owner  of  a  mate- 
rial factor  of  production  over  the  commercial  equiva- 
lent of  the  factor's  product.  Is  this  claim  morally 
valid?  Our  special  concern  here  is  with  material 
capital  which  the  owner  has  purchased  without  the 
assistance  of  a  loan,  and  which  he  manages  in  his 
capacity  of  employer  and  director  of  industry. 

It  seems  clear  that  the  right  of  such  a  man  to  the 
imputed  fruit  of  his  property,  in  other  words,  to 
interest  on  his  capital,  is  as  real  and  legitimate  as 
any  other  right  of  ownership.  Who  else  can  right- 
fully claim  this  portion  of  the  general  product?  Not 
the  laborer,  for  if  we  assume  that  his  needs  and  ef- 
forts are  already  fully  remunerated,  the  only  title 
that  can  be  urged  in  his  behalf  is  that  of  produc- 
tivity. Now  it  is  true  that  the  co-operation  of  the 
laborer  is  necessary  to  make  capital  actually  pro- 
ductive ;  but  it  is  also  true  that  the  presence  of  capi- 
tal causes  the  laborer's  efforts  to  be  followed  by  a 
larger  product  and  a  higher  wage  than  would  be 
possible  if  he  worked  alone.  Consequently  the  laborer 
is  not  the  sole  cause  of  the  product.  Some  part  of 
it  has  been  as  truly  produced  by  capital  as  some  part 
of  a  potato  is  produced  by  moisture.  In  so  far  as 
this  portion  of  the  product  is  adequately  represented 
by  interest,  the  latter  cannot  justly  be  claimed  by 
the  laborer  on  the  ground  of  productivity.  Can  it 
255 


A    LIVING    WAGE 

be  reasonably  claimed  by  the  consumer  in  the  shape 
of  lower  prices  for  the  finished  product?  As  director 
of  production,  the  capitalist-undertaker  receives  the 
equivalent  of  his  exertion  in  profits ;  as  capitalist,  he 
performs  no  labor  nor  undergoes  any  sacrifice  when 
he  allows  his  capital  to  be  used  as  a  factor  of  pro- 
duction; why  then  should  he  claim  its  product? 
Does  not  the  latter  properly  belong  to  the  whole 
people?  The  theory  that  is  implied  in  these  ques- 
tions maintains  that  interest  should  be  abolished,  on 
the  ground  that  the  productive  forces  of  nature, 
artificial  as  well  as  natural,  cannot  rightfully  become 
the  subject  of  private  ownership,  but  are  the  com- 
mon property  of  the  community.  This  being  so, 
the  product  of  capital  should  go  to  the  community, 
and  not  to  any  one  individual.  To  the  community  it 
will  go  if  no  interest  is  paid  and  the  price  of  the 
product  is  reduced  accordingly.  Even  in  this  theory 
the  principle,  "to  the  owner  of  a  thing  belongs  its 
fruits,"  is  acknowledged  and  asserted.  The  obvious 
answer  to  the  theory  is  that  the  assumption  under- 
lying it  is  unsound.  There  are  in  men  certain  in- 
eradicable convictions,  desires,  and  aspirations 
which  make  it  impossible  that  social  welfare  and  the 
welfare  of  the  majority  of  individuals  should  be  as 
well  conserved  by  common  as  by  private  ownership 
of  capital.  Now  what  the  race  firmly  believes  to  be 
just  and  necessary  in  the  matter  of  opportunities  of 
ownership  must  be  taken  as  fairly  representative  of 
objective  justice;  and  social  welfare  must  be  accept- 
ed as  a  sufficient  justification  of  private  ownership 
of  capital.  After  all,  the  primary  title  and  reason  of 
256 


OBLIGATION    OF    THE    EMPLOYER 

possession  is  the  needs  of  men,  and  if  these  are 
better  provided  for  by  the  institution  of  private 
property  in  the  productive  resources  of  the  earth 
the  institution  is  morally  legitimate.  The  question 
of  right  at  issue  here  does  not  hinge  on  any  meta- 
physical consideration  of  the  intrinsic  qualities  of 
capital-goods,  but  solely  on  the  comparative  utility 
of  the  two  kinds  of  ownership  to  attain  the  end  of  all 
ownership.  This  principle,  too,  is  admitted  by  the 
opponents  of  private  ownership  ;  for  their  opposition 
is  based  on  the  assumption  that  human  needs  and 
human  welfare  would  be  better  subserved  if  capital 
were  owned  collectively.  If  they  are  mistaken  in 
this,  individual  proprietorship  of  capital  is  right,  and 
the  individuals  may  justly  claim  its  product. 

Again  it  must  be  insisted  that  we  can  never  know 
whether  the  productivity  of  capital  relatively  to  that 
of  the  other  factors,  is  precisely  expressed  in  the 
rate  of  interest.  Yet  interest  is  the  only  available 
measure  of  such  productivity,  and  is,  therefore,  a 
sufficient  recognition  of  the  moral  principle,  "to  the 
owner  of  a  thing  belongs  its  fruits." 

This  principle  is  valid,  but  it  is  not  the  only  valid 
principle  of  ownership.  Consequently,  a  fair  rate 
of  interest  is  not  necessarily  one  that  will  yield  to  the 
owner  the  full  product  of  his  capital.  It  is  rather 
that  rate  which  will  safeguard  the  right  of  the  capi- 
talist consistently  with,  and  in  subordination  to,  the 
claims  of  needs,  efforts,  and  the  productivity  of 
labor.  For  the  productivity  of  property,  natural  or 
artificial,  is  the  least  and  lowest  of  all  the  titles  of 
property.     All  the  other  titles  are  based  upon  the 

17  257 


A    LIVING    WAGE 

personal  dignity,  personal  exertion,  or  personal 
achievements  of  their  beneficiary:  interest  accrues 
to  the  owner  of  capital  without  any  reference  to 
his  present  needs,  efforts,  or  achievements.  The 
employer's  right  to  obtain  the  ordinary  rate  of  inter- 
est on  his  capital  is,  therefore,  subordinate  to  the 
right  of  his  employees  to  receive  the  means  of  sup- 
plying their  essential  needs  in  accordance  with  the 
standards  of  decent  living. 

Concerning  the  second  title  to  interest,  it  must  be 
noted  that  the  accumulation  of  a  great  part  of  the 
capital  now  in  existence  has  not  cost  its  owners  any 
real  pain  of  abstinence.  Some  of  it  has  been  in- 
herited, and  some  of  it  saved  out  of  incomes  that 
were  in  excess  of  all  the  existing  wants  of  the 
recipients.  None  of  the  inheritors  of  wealth  have 
practised  the  self-denial  incidental  to  continuous 
saving,  though  a  portion  of  them,  namely,  the  bene- 
ficiaries of  small  legacies,  undoubtedly  made  some 
sacrifice  when  they  converted  their  inheritance  into 
capital,  instead  of  immediately  consuming  it.  But  a 
man  enjoying  a  very  large  income  suffers  no  notable 
inconvenience  when  he  devotes  a  goodly  portion 
of  it  to  the  purposes  of  production.  As  applied  to 
this  kind  of  "saving,"  Lassalle's  sarcastic  comments 
on  the  "abstinence  theory"  are  fully  justified.  * 

On  the  other  hand,  much  of  our  present  stock  of 
capital  represents  a  real  sacrifice  of  desires  that 
clamored  for  satisfaction  when  the  saving  took  place. 
According  to  Mr.  Devas,  even  this  species  of  saving 

^  See  his  work,  "Herr  Bastiat  Schultze  von  Delitsch,"  ch. 
IV. 

258 


OBLIGATION     OF     THE    EMPLOYER 

"is  amply  rewarded  without  any  need  of  interest  or 
dividends.  For  the  workers  with  heads  or  hands 
keep  the  property  intact,  ready  for  the  owner  to 
assume  whenever  convenient,  when  he  gets  infirm 
or  weak,  or  when  his  children  have  grown  up  and 
can  enjoy  the  property  with  him."  ^  Saved  wealth 
cannot,  indeed,  be  continued  in  existence  unless  it  is 
embodied  in  material  goods ;  money  must  be  either 
spent  or  converted  into  capital-instruments ;  and  yet 
there  is  grave  reason  to  doubt  whether  all  of  those 
who  save  at  the  expense  of  present  desires  would  re- 
gard the  mere  preservation  of  their  wealth  as  suffi- 
cient recompense  for  the  abstinence  undergone.  It 
would  seem  that  those  savers  who  do  not  take  this 
view  have  a  just  claim  to  an  additional  remunera- 
tion in  the  form  of  interest, — unless  sufficient  capital 
would  come  into  existence  without  their  contribu- 
tion. In  that  case  they  would  be  in  the  position  of 
those  who  make  sacrifices  to  produce  something 
that  society  does  not  want. 

No  definite  answer  can  be  made  to  these  questions 
of  fact,  and,  so  far  as  our  present  purpose  is  con- 
cerned, none  is  necessary.  Even  those  employers 
who  have  accumulated  capital  at  the  cost  of  self- 
denial,  and  who  would  not  have  saved  had  there  been 
no  prospect  of  interest,  have  a  less  urgent  claim  to 
interest  than  have  their  employees  to  a  Living  Wage. 
When  both  claims  cannot  be  satisfied,  or  fully  sat- 
isfied, the  former  must  yield.  For  the  supreme 
title  of  ownership  is  that  based  on  the  dignity  of  the 
person,  on  his  essential  needs;  and  the  employer  is 

^"Political  Economy,"  p.  507,  2d  edition. 
259 


A    LIVING    WAGE 

morally  bound  to  so  distribute  the  product  of  his 

business  that,  after  he  has  taken  out  the  requisites 
of  a  decent  living  for  himself,  the  claims  of  his  em- 
ployees to  a  Living  Wage  will  be  fully  satisfied,  even 
to  the  complete  neglect  of  such  claims  as  unusual 
productivity  of  labor,  the  productivity  of  his  capital 
and  his  sacrifices  of  saving. 

The  obligation  that  in  private  business  rests  upon 
the  employer  is  distributed  in  a  corporation,  or  joint- 
stock  company,  among  all  the  shareholders.  Since 
the  direction  of  the  business  resides  ultimately  in 
them,  they  are  the  real  employers,  and  they  cannot 
reasonably  shirk  the  responsibility  of  paying  just 
wages.  This  responsibility  falls  in  a  particular  man- 
ner upon  the  board  of  directors  and  the  officers,  but 
it  extends  in  some  degree  to  the  owner  of  even  one 
share  of  stock.  Like  the  private  employer  with  re- 
gard to  the  money  that  he  has  invested  in  his  busi- 
ness, the  stockholders  of  a  corporation  are  morally 
bound  to  pay  all  the  employees,  including,  of  course, 
those  who  are  actively  engaged  in  its  direction,  a 
Living  Wage  before  they  pay  themselves  dividends. 
And  it  would  seem  that  those  shareholders  whose 
labor  of  direction  is  confined  to  annual  or  semi- 
annual meetings,  and  who  have  no  means  of  living 
except  the  dividends  accruing  to  them,  have  a  less 
urgent  right  to  receive  a  decent  livelihood  there- 
from than  have  the  employees  to  obtain  a  Living 
Wage.  The  needs  of  the  latter  are  no  more  im- 
portant than  the  needs  of  the  non-working  stock- 
holders, but  they  are  associated  with  labor,  personal 
effort,  which  is  a  stronger  title  of  ownership  than 
260 


OBLIGATION    OF    THE    EMPLOYER 

the  productivity  of  capital  or  past  sacrifices  of  sav- 
ing. 

To  sum  up :  the  obligation  to  pay  a  Living  Wage 
falls  upon  the  employer  as  a  reasonable  consequence 
of  his  position  in  the  economic  organism.  From  this 
responsibility  he  cannot  free  himself  by  appealing 
to  the  labor  contract  or  to  the  productivity  of  labor ; 
for  the  former  is  consistent  with  extortion,  while  the 
latter  is  usually  unknowable,  and  is  always  inferior 
to  needs  as  a  canon  of  distribution.  Inability  to  per- 
form the  obligation  suspends  it,  but  inability  must 
not  be  so  interpreted  as  to  favor  the  superfluous 
needs  of  the  employer  at  the  expense  of  the  essential 
needs  of  the  laborer.  The  employer's  right  to  obtain 
interest  on  the  capital  that  he  has  invested  in  his 
business,  though  real,  is  subordinate  to  the  laborer's 
right  to  a  Living  Wage. 

Note  to  Second  Edition. — The  claim  of  the 
employer  to  State  aid  whenever  he  is  unable  to  pay 
a  Living  Wage  and  at  the  same  time  obtain  interest 
on  his  investment,  is  unsound  ethically  as  well  as 
economically.  Competent  employers  will  not  need 
such  assistance,  and  incompetent  ones  have  no  valid 
title  to  it.  On  the  other  hand,  the  employer  who 
cannot  make  a  living  profit  and  also  pay  a  Living 
Wage  from  his  business,  is  not  obliged  to  make  up 
the  latter  from  property  with  which  he  has  no  con- 
nection as  an  employer. 


261 


CHAPTER  XVI. 


The  Obligation  of  the  Loan-Capitalist^  the 

Landowner,  the  Consumer,  and  the 

Man  of  Wealth 

The  loan-capitalist  and  the  landowner  are  under  no 
practical  obligation  to  supplement  directly  the  wages  of  the 
underpaid  laborer.  The  consumer  can  discourage  the  pay- 
ment of  insufficient  wages  by  refusing  to  patronize  the 
ofifending  manufacturers  and  merchants.  And  he  is  moral- 
ly bound  to  do  so.  The  meaning  of  "superfluous"  goods. 
These  ought  to  be  given  without  reservation  for  the  relief 
of  the  underpaid.  Methods  by  which  such  distribution 
could  be  carried  out. 

The  employer  may  fail  to  pay  a  Living  Wage 
either  because  he  cannot  or  because  he  will  not. 
Does  the  obligation,  thus  unfulfilled,  revert  to  other 
members  of  the  community?  to  whom?  and  in  what 
measure  ? 

Undoubtedly  a  part  of  the  responsibility  of  treat- 
ing the  laborer  justly  is  shared  by  the  capitalist  who 
has  loaned  money  to  the  employer  for  use  in  his 
business,  and  by  the  landowner  who  has  rented  him 
land  for  the  same  purpose.  They  are  beneficiaries 
of  the  laborer's  exertion,  and  consequently  are  in- 
debted to  him  in  a  particular  way ;  they  also  receive 
a  portion  of  the  product  of  industry,  and  are  thereby 
262 


OBLIGATION      OF     THE     CAPITALIST 

enabled,  in  many  cases,  to  do  something  toward  sup- 
plying what  is  wanting  in  the  laborer's  remunera- 
tion. Yet  if  the  employer's  failure  to  pay  a  Living 
Wage  is  not  due  to  inability  on  his  part,  it  seems 
sufficiently  clear  that  the  loan-capitalist  and  the  land- 
owner have  no  direct  obligation  to  make  good  the 
difference.  In  so  far  as  their  incomes  surpass  their 
reasonable  needs,  they  are,  of  course,  bound  to  make 
a  righteous  use  of  the  excess ;  but  their  economic 
position  scarcely  obliges  them  to  do  more  than  exert 
pressure  upon  the  employer  to  compel  him  to  dis- 
charge fully  his  wage-paying  jbligations. 

When,  however,  the  employer  is  really  unable  to 
give  all  his  employees  the  means  of  a  decent  liveli- 
hood, the  right  of  the  loan-capitalist  and  landowner 
to  receive  the  product  of  their  property  in  the  form 
of  interest  and  rent  seems  to  be  inferior  to  the  right 
of  the  laborer  to  obtain  a  Living  Wage.  The  latter 
has  contributed  his  labor  power,  the  former  have 
contributed  the  use  of  their  goods  to  the  making  of 
the  common  product.  In  the  distribution  of  the 
product  the  claims  of  labor,  personal  effort,  ought 
to  be  preferred  to  those  of  mere  ownership  in  the 
product's  material  cause.  Consequently,  the  em- 
ployer should  be  allowed  and  constrained  to  provide 
his  employees  with  a  Living  Wage  before  returning 
rent  to  the  landowner  or  interest  to  the  loan-capital- 
ist This  seems  to  be  the  theoretical  justice  of  the 
situation.  An  attempt  to  put  it  in  practice  would 
probably  be  followed  by  greater  evils  than  those 
that  are  sought  to  be  remedied.  Let  us  assume 
that  the  landowner  and  the  loan-capitalist  do  their 
263 


A    LIVING    WAGE 

share  by  instructing  the  employer  to  give  them  their 
portions  of  the  product  only  after  he  has  fully 
remunerated  all  the  laborers.  In  a  large  propor- 
tion of  cases  they  cannot  know  whether  the  residue 
is  really  insufficient  to  yield  them  the  whole  amount 
of  rent  and  interest  conditionally  stipulated.  The 
employer  will  in  such  circumstances  be  able  to  re- 
tain for  himself  what  he  owes  to  them.  Even  if  he 
acts  with  entire  honesty  in  this  respect,  he  may,  with- 
out being  compelled  to,  continue  to  sell  his  product 
at  a  price  that  will  render  full  payments  of  rent  and 
interest  impossible.  To  be  sure,  if  the  loan-capital- 
ist and  the  landowner  could  always  be  certain  that 
the  employer  did  his  best  to  make  them  a  complete 
return  for  the  use  of  their  property,  their  obliga- 
tions, as  above  outlined,  would  seem  to  be  actual 
and  concrete.  As  things  are,  however,  their  respon- 
sibility toward  the  underpaid  laborer  who  works 
with  their  property  must  be  discharged  in  some 
other  way. 

When  the  employer's  inability  to  pay  a  Living 
Wage  is  due  to  the  low  price  at  which  he  is  com- 
pelled to  sell  his  product  rather  than  to  his  own  in- 
competence, the  chief  beneficiary  is,  of  course,  the 
consumer.  Yet  the  average  consumer  is  wholly  in- 
dififerent  to  any  responsibility  toward  the  under- 
paid producers  of  the  cheap  goods  that  he  so  vigi- 
lantly and  avidly  seeks  to  secure.  In  this  connection 
the  following  paragraph  from  the  pen  of  Mr.  W.  S. 
Lilly  is  extremely  suggestive : 

"One  afternoon  I  chanced  to  meet  in  Regent 
Street  three  lady  friends  who  had  come  up  to  town 
264 


OBLIGATION      OF     THE      CAPITALIST 

for  shopping,  and  I  remember  their  surprise  and  de- 
light at  finding  in  one  of  the  estabhshments  which 
they  visited  shirt  blouses,  of  a  dainty  kind,  on  sale 
at  half-a-crown  each.  They  purchased  a  dozen,  and 
evidently  regarded  this  cheapness  as  simply  miracu- 
lous. They  were  so  good  as  to  invite  me  to  dine 
with  them  that  evening  at  a  restaurant  of  which  I 
will  not  mention  the  name,  for  I  have  no  desire  of 
advertising  it.  Nor  indeed  is  that  necessary.  The 
perfection  of  its  cuisine  and  the  excellence  of  its 
wines  have  deservedly  won  for  it  a  world-wide 
reputation.  It  is  as  deservedly  celebrated  for  its 
high  charges.  I  could  not  help  noticing  that  on 
the  occasion  of  which  I  speak  my  kind  hostess  re- 
ceived very  little  change  from  the  five  pound  note 
which  she  tendered  in  payment  for  our  dinner.  The 
evening  was  fine :  and  after  taking  leave  of  my 
friends  I  set  out  to  walk  to  South  Kensington. 
When  I  reached  Hyde  Park  Corner  a  carriage  dashed 
rapidly  out  of  the  Park,  and  a  young  girl,  who  was 
walking  just  in  front  of  me,  was  almost  run  over. 
Apparently  she  had  not  noticed  it :  fortunately  I  had 
seized  her  by  the  arm  and  pulled  her  back  in  time. 
She  seemed  a  good  deal  frightened  and  inclined  to 
be  hysterical.  A  constable  came  up,  and  I  looked 
at  him  interrogatively,  wondering  whether  she  was 
quite  sober.  He  caught  my  meaning  and  after  a 
swift  glance  at  her,  said :  *No,  sir,  it's  not  drink :  it's 
hunger.  If  she  sits  down  for  a  bit  she  will  pull  her- 
self together.'  He  helped  her  to  a  seat  just  inside 
the  Park  and  left  her  there,  after  a  minute,  murmur- 
ing something  which  I  did  not  quite  catch  abont 
265 


A    LIVING    WAGE 

sending  someone  to  her.  The  girl  said  to  me :  'Thank 
you  for  saving  me ;  I  was  nearly  killed,  I  think' ;  and 
she  shuddered.  She  was  a  slight,  delicate-looking 
creature,  of  plaintively  prepossessing  appearance, 
neatly  dressed,  and  quiet  in  manner.  I  replied: 
'Yes,  you  had  a  narrow  escape ;  now  that  you  have 
recovered  from  your  fright,  shall  I  put  you  into  a 
hansom  and  send  you  home?'  'Thank  you,'  she 
answered,  'but  I  mustn't  go  back  yet:  I  have  come 
out  to  try  to  earn  a  little  money;  I  spent  my  last 
shillings  in  buying  those  shoes  to  come  out  in,  and  I 
owe  my  landlady  a  fortnight's  rent:  I  haven't  been 
able  to  get  any  work  lately.'  I  inquired  what  she 
worked  at.  She  told  me  she  made  ladies'  shirt 
blouses,  but  could  not  live  on  what  she  earned  in 
that  way ;  she  was  paid  four  shillings  for  making  a 
dozen :  it  was  the  usual  rate ;  she  worked  for  Messrs. 

,  mentioning  the  tradesmen  whose  shop  my 

fair  friends  had  visited  that  afternoon.  It  is  a 
dictum  of  Renan  that  the  miraculous  is  the  unex- 
plained ;  and  this  was  the  explanation  of  those 
miracles  of  cheapness  at  which  my  friends  had 
marveled."  ^ 

The  obligation  of  the  consumer  toward  the  under- 
paid laborer  involves  two  questions :  can  he  do  any- 
thing to  bring  about  better  wages  ?  and  is  he  moral- 
ly bound  to  make  use  of  whatever  power  he  possesses 
in  this  direction? 

Since  all  production  and  trade  are  carried  on  with 
a  view  to  the  wants  of  the  consumer,  the  latter  holds 

^  "The  Cost  of  Cheapness,"  "The  Fortnightly  Review,"  April, 
1905. 

266 


OBLIGATION      OF      THE      CAPITALIST 

the  dominant  position  in  industry.  Goods  will  be 
produced  of  such  quality,  in  such  amounts,  and 
under  such  conditions  of  employment  as  he  efifect- 
ively  demands ;  that  is,  in  accordance  with  his  wishes 
plus  his  readiness  to  pay  the  necessary  costs.  If  he 
says  to  the  manufacturer  or  to  the  merchant,  "unless 
you  pay  your  employees  a  Living  Wage,  I  will  not 
buy  your  goods,"  his  terms  will  be  accepted.  Conse- 
quently an  organization  embracing  the  majority  of 
consumers,  and  employmg  agents  to  ascertain  the 
wages  that  have  been  paid  for  the  production  of  the 
various  commodities  on  the  market  and  the  prices 
for  which  the  latter  must  sell  in  order  that  the  pro- 
ducers may  be  decently  remunerated,  could  soon  put 
an  end  to  the  evil  of  underpaid  labor  in  industrial  em- 
ployments. While  an  association  of  such  magnitude 
is  not  inherently  impossible,  it  is  clearly  impractic- 
able, or  at  least  so  unlikely  as  to  render  serious  con- 
sideration of  it  a  waste  of  time.  As  things  are,  the 
consumer  who  wishes  to  discourage  low  wages  must 
act  individually  or  as  a  member  of  local  and  incom- 
plete organizations.  When  the  goods  that  he  wishes 
to  buy  can  be  obtained  from  manufacturers  and 
dealers  that  treat  their  employees  fairly,  he  can 
patronize  these  in  preference  to  firms  that  are  unfair. 
How  is  he  to  distinguish  between  the  two  classes  of 
employers?  Not  infrequently  the  necessary  infor- 
mation will  come  to  him  casually  and  through 
various  unrelated  channels ;  more  often  perhaps  it 
will  be  available  through  the  systematic  work  of 
Labor  Unions  and  the  Consumer's  League.  The 
former  affix  their  Union  Label  to  those  goods  that 

207 


A    LIVING    WAGE 

have  been  produced  in  accordance  with  their  stand- 
ard of  remuneration,  hours,  workshop  conditions, 
etc.  The  Consumer's  League  also  has  a  Label 
which  it  puts  upon  articles  manufactured  in  the  con- 
ditions that  it  regards  as  satisfactory,  and  a  "White 
List"  of  merchants  who  treat  their  employees  fairly. 
It  may  be  assumed,  therefore,  that  the  producers  of 
goods  that  bear  any  of  these  marks  of  approval  are 
receiving,  if  not  a  Living  Wage,  at  least  a  nearer 
approach  to  it  than  their  fellows  in  the  same  em- 
ployments. Purchasers  who  call  for  these  goods, 
and  especially  those  who  affiliate  themselves  to  the 
Consumer's  League,  will  contribute  very  materially 
toward  the  encouragement  of  fair  employers  and 
the  discouragement  of  the  unfair. 

Is  the  consumer  morally  bound  to  exercise  such 
discrimination  in  making  his  purchases?  He  is  not 
directly  responsible  for  low  prices  and  low  wages, 
for  he  takes  no  active  part  in  the  making  of  either.  ^ 
Yet  he  encourages  the  continuation  of  existing  bad 
conditions  when  he  seeks  out  and  patronizes  the 
dealers  in  cheap  goods,  regardless  of  the  wages  that 
have  been  paid  to  the  producers.  The  fact  that  he 
is  not  primarily  responsible  does  not  acquit  him  of 
all  responsibility  and  all  obligation ;  for,  as  Dr.  Cun- 
ningham observes :  "There  is  always  this  double 
responsibiHty  to  be  looked  to,  responsibility  for  not 
doing  our  best  to  cure  the  evil,  and  responsibility 
for  its  existence."  ^  If  a  Living  Wage  is  to  prevail 
in  industry  the  consumer  must  provide  the  means 

^  Cf.  Webb,  "Industrial  Democracy,"  pp.  671-673,   ist  ed. 
'"The  Use  and  Abuse  of  Money,"  p.  157. 
268 


OBLIGATION      OF     THE      CAPITALIST 

of  paying  it.  This  is  a  function  that  he  cannot 
shirk  or  shift  to  others.  He  is  obHged  to  pay  a  fair 
price  for  the  goods  that  he  buys,  and  a  fair  price 
necessarily  means  one  that  will  enable  the  producers 
to  be  decently  remunerated.  This  elementary  and 
fundamental  obligation  is  indisputable :  the  practical 
question  concerns  the  form  that  the  obligation  as- 
sumes when  a  combination  of  forces,  partly  within 
and  partly  without  the  control  of  the  consumer,  has 
brought  or  threatens  to  bring  wages  below  the  mini- 
mum of  justice.  Suppose  the  consumer  finds  him- 
self so  placed  that  the  issue  depends  upon  his  action : 
if  he  buys  goods  from  A  all  the  laborers  will  get  a 
Living  Wage ;  if  he  patronizes  B — who  is  selling 
more  cheaply — they  must  continue  to  be  underpaid, 
since  the  returns  are  not  sufficient  to  give  them  more. 
Here  there  cannot  be  a  shadow  of  doubt  concerning 
his  responsibility  to  the  laborer,  and  his  obligation  to 
make  his  purchase  from  A.  This  hypothetical  case  is 
in  some  measure  realized  to-day  whenever  a  consum- 
er finds  it  within  his  power  to  choose  between  mer- 
chants who  deal  in  goods  that  have  been  produced 
under  humane  conditions  and  merchants  whose  goods 
have  involved  injustice  to  labor.  The  difference 
is  one  of  degree  only;  for  the  actual  consumer  can 
do  something  toward  the  abolition  of  insufficient 
wages.  What  he  can  reasonably  do  in  this  direc- 
tion he  is  morally  bound  to  do,  and  the  same  is  true 
of  the  merchant  in  relation  to  different  manufactur- 
ers. The  effects  of  any  single  individual  may  seem 
insignificant,  but  the  combined  actions  of  all  who 
are  in  a  position  to  exercise  the  discrimination  here 
269 


A    LIVING    WAGE 

advocated  would  lead  to  very  large  results.  Be- 
sides, the  reform  of  existing  conditions  will  not  be 
accomplished  by  any  single  agency  or  method;  the 
co-operation  of  many  and  diverse  forces,  persons, 
and  classes  will  be  essential.  Among  all  the  classes 
that  might  contribute  to  this  end,  the  consumer  is 
perhaps  the  least  conscious  of  his  power  and  respon- 
sibility. In  the  simpler  economic  relations  of  the 
Middle  Ages,  when  the  consumer  usually  dealt  di- 
rectly with  the  maker  of  the  goods  that  he  bought, 
the  obligation  to  pay  a  price  that  would  cover  fair 
wages  was  easily  perceived  and  acknowledged. 
To-day  he  is  so  far  removed  from  the  original  pro- 
ducer, the  causes  of  low  wages  are  so  various,  and 
the  whole  mechanism  of  industry  is  so  anarchic, 
that  he  seldom  gives  a  thought  to  the  relation  be- 
tween himself  and  the  man  who  ultimately  makes 
cheap  goods  possible.  Yet  to  divide  and  obscure 
responsibility  is  not  to  destroy  it;  consequently  the 
consumer  is  morally  answerable  for  insufficient 
wages  in  proportion  to  his  power  to  make  reasonable 
efforts  toward  bettering  them. 

Thus  far  of  the  obligation  of  those  persons  who  are 
directly  benefited  by  the  toil  of  the  underpaid  labor- 
er, and  who  stand  in  more  or  less  immediate  econom- 
ic relations  to  him.  Let  us  consider  briefly  that  class 
of  persons  who  are  bound  to  the  insufficiently 
remunerated  workers,  as  to  other  sections  of  the  un- 
fortunate, by  the  general  duty  of  charity  or  benefi- 
cence. These  are  the  possessors  of  superfluous 
goods,  the  rich.     From  St.  Paul  *  to  St.  Basil  ^ ;  from 

^  "Let  your  abundance  supply  their  want,"  II  Cor.  VIII,  14. 
'"Are  you  not  a  despoiler,  since  you  have  made  your  owa 
270 


OBLIGATION      OF     THE      CAPITALIST 

St.  Basil  to  St  Thomas  of  Aquin  ^ ;  and  from  St. 
Thomas  to  Pope  Leo  XIII,^  the  Christian  teaching 
has  been  that  superfluous  goods  are  a  trust  to  be 
administered  for  the  benefit  of  the  needy.  The 
classification  of  private  possessions,  or  private  in- 
come, made  by  St.  Thomas  indicates  the  meaning 
that  all  Catholic  authorities  attach  to  the  phrase, 
"superfluous  goods."  A  man's  goods,  he  says,  may 
be  divided  into  three  categories :  first,  those  that  are 
absolutely  necessary  to  sustain  life:  second,  those 
that  are  required  for  the  proper  maintenance  of 
social  position:  third,  those  that  are  left  over  after 
both  of  these  ends  have  been  met.  ^  It  is  not  easy, 
however,  to  mark  off  the  last  named  possessions — 
those  that  are  "superfluous" — from  those  of  the 
second  category.  The  majority  of  men  can  readily 
persuade  themselves  that  their  whole  income  is  need- 
ed either  to  support  their  present  style  of  living,  to 
provide  liberally  for  the  future  wants  of  themselves 
and  their  families,  or  to  better  their  present  condi- 
tion. "Bettering  their  condition,"  means  for  some 
men  the  indefinite  accumulation  of  wealth  merely 
for  the  sake  of  the  consequent  power  and  prestige, 
and  for  some  women  the  progressive  ability  to  out- 
shine their  neighbors  in  extravagant  entertainment, 
dress,  equipage,  etc.     It  is  admitted  on  all  sides  that 

that  which  you  have  received  to  distribute?"  Migne,  "Patrologia 
Graeca,"  vol.  xxxi,  col.  275. 

^  "To  give  alms  from  one's  superfluous  goods  is  strictly 
commanded,"  "Summa  Theologica,"  2a.  2ae.,  q.  32,  art  i. 

^  "When  one's  necessities  have  been  fairly  supplied,  and 
one's  position  fairly  considered,  one  is  bound  to  give  to  the 
indigent  out  of  that  which  remains,"  Encyclical,  "On  the  Con- 
dition of  Labor." 

*  "Summa  Theologica,"  2a.  2ae.,  q.  ^^t  art.  6. 
271 


A    LIVING    WAGE 

luxury  is  reprehensible,  but  the  principle  of  the  rel- 
ativity of  luxury  has  been  converted  into  the  doc- 
trine that  luxury  is  merely  expenditure  in  excess  of 
income.  According  to  this  interpretation,  all  in- 
comes, except  possibly  a  few  of  the  very  largest, 
can  be  legitimately  utilized  in  maintaining  or  ex- 
panding the  social  position  of  their  recipients.  Utter- 
ly insignificant,  therefore,  is  the  number  of  persons 
who  possess  superfluous  goods,  and  are  held  to  the 
duty  of  almsgiving  or  philanthropy.  This  apothe- 
osis of  groveling  selfishness  is  not,  however,  peculiar 
to  our  own  time.  In  the  last  quarter  of  the  seven- 
teenth century,  Pope  Innocent  XI  condemned  the 
following  propositions :  "It  is  scarcely  possible  to 
find  among  people  engaged  in  worldly  pursuits,  even 
among  kings,  goods  that  are  superfluous  to  social 
position.  Therefore  hardly  anyone  is  bound  to  give 
alms  from  this  source."  If  these  doctrines  were 
false  then  they  are  a  hundred  times  false  to-day.  In 
a  general  way  it  may  be  said  that  all  of  that  portion 
of  a  man's  income  is  superfluous  that  cannot  be  used 
for  the  satisfaction  of  his  reasonable  wants.  As  un- 
reasonable must  be  regarded  all  wants  whose  satis- 
faction involves  injury  to  health,  mind,  or  character. 
Consequently,  excessive  quantities  of  food  or  drink ; 
dyspepsia-breeding  delicacies ;  clothing,  dwellings, 
and  household  furnishings  that  satisfy  the  desire  to 
outdo  one's  neighbors  in  costliness  and  showiness, 
instead  of  increasing  comfort  or  developing  the 
esthetic  sense ;  indefinite  amounts  of  idleness,  amuse- 
ments, entertainments,  and  travel, — are  all  unreason- 
able and  unjustifiable.     They  all  spell  deterioration 

272 


OBLIGATION      OF     THE      CAPITALIST 

and  debasement,  the  pampering-  of  what  is  lowest  in 
man  at  the  expense  of  what  is  highest.  Good  clothes 
and  good  houses  are  legitimate  and  useful  inasmuch 
as  they  promote  comfort,  self-respect,  and  the  ap- 
preciation of  the  beautiful ;  but  they  are  clearly  harm- 
ful to  character  when  they  respond  to  the  vulgar 
desire  to  excel  in  what  one  has  rather  than  in  what 
one  is  or  what  one  does.  Recreation,  amusement, 
social  diversion,  entertainment,  and  travel  are  all 
helpful  within  certain  narrow  limits ;  w'hen  they 
take  up  more  than  a  small  portion  of  a  person's  time 
and  attention  they  become  not  merely  useless  but 
demoralizing.  Indeed,  the  amount  of  money  that 
can  be  expended  for  the  conveniences  of  life,  the 
ornamental  and  hedonistic  side  of  life,  consistently 
with  a  due  regard  for  health,  mind,  and  character, 
is  very  much  smaller  than  the  majority  of  men,  rich 
and  poor,  habitually  assume.  And  everything  be- 
yond this  belongs  in  the  category  of  superfluous 
goods. 

Is  a  man  obliged  to  devote  the  zvhole  of  his  super- 
fluous goods  or  income  to  works  of  benevolence? 
Mr.  Andrew  Carnegie  answers  in  the  affirmative, 
"This,  then,  is  held  to  be  the  duty  of  the  man  of 
wealth :  to  set  an  example  of  modest,  unostentatious 
living,  shunning  display  or  extravagance  ;  to  provide 
moderately  for  the  legitimate  wants  of  those  depend- 
ent upon  him ;  and,  after  doing  so,  to  consider  all 
surplus  revenues  which  come  to  him  simply  as  trust 
funds,  which  he  is  called  to  administer,  and  strictly 
bound  as  a  matter  of  duty  to  administer  in  the  man- 
ner which,  in  his  judgment,  is  best  calculated  to  pro- 

i8  273 


A    LIVING    WAGE 

duce  the  most  beneficial  results  for  the  community — • 
the  man  of  wealth  thus  becoming  the  mere  trustee 
and  agent  for  his  poorer  brethren,  bringing  to  their 
service  his  superior  wisdom,  experience,  and  ability 
to  administer,  doing  for  them  better  than  they  would 
or  could  do  for  themselves."  ^  The  Reverend  L. 
Garriguet  is  substantially  of  the  same  opinion:  "A 
man  is  obliged  to  give  to  the  poor  all  his  superfluous 

goods To  keep  back  a  portion  of  them,  even 

an  inconsiderable  portion,  is  to  go  against  the  order 
of  Providence  and  to  retain  for  self  what  ought  to 
benefit  the  neighbor."  ^  The  position  of  these  writ- 
ers seems  to  be  in  harmony  both  with  the  law  of  the 
Gospel  and  the  dictates  of  reason.  Catholic  moral- 
ists of  authority  generally  deal  with  the  matter  some- 
what more  precisely.  They  divide  human  distress 
into  three  classes :  extreme,  grave,  and  ordinary.  A 
person  is  said  to  be  in  extreme  need  when  he  is  so 
placed  that  he  cannot,  morally  speaking,  escape 
death,  or  some  almost  equivalent  evil,  such  as  loss 
of  health  or  of  limb,  unless  he  is  assisted  by  others ; 
in  grave  necessity,  when  perils  of  this  magnitude  are 
not  actually  imminent  but  merely  probable,  or  when 
things  that  are  necessary  cannot  be  procured  without 
great  difficulty;  in  ordinary  need,  when  extreme  or 
grave  evils  can  be  avoided  by  reasonable  personal 
effort,  or  when  minor  inconveniences  must  be  suf- 
fered continuously  if  assistance  come  not  from  with- 
out. *  The  authorities  that  we  are  considering  are 
not  agreed  as  to  the  proportion  of  superfluous  goods 

^"The  Gospel  of  Wealth,"  p.  15. 

'  "La  propriete   privee ,"  tome  II,  pp.  40,  42. 

^Cf.  Lehmkuhl,  "Theologia  Moralis,"  vol.  ii,  No.  601. 

274 


OBLIGATION      OF      THE      CAPITALIST 

that  ought  to  be  given  for  the  reHef  of  ordinary  need : 
many  of  them  say  that  "something"  must  be  given ; 
others,  that  each  possessor  should  give  as  much  as 
would  be  sufficient  to  remove  all  such  need  if  all  oth- 
er possessors  gave  proportionately ;  others,  that  two 
per  cent,  of  a  person's  income  should  be  so  expended  ; 
and  still  others,  that  two  per  cent,  of  one's  super- 
fluous goods  would  satisfy  the  obligation.  They 
seem  to  be  virtually  unanimous,  however,  in  main- 
taining that  persons  having  superfluous  goods  are 
morally  bound  to  give  away  as  much  of  these  as  is 
required  to  relieve  all  extreme  and  grave  need.  ^ 
Practically,  this  would  seem  to  mean  that  a  man  is 
bound  to  devote  his  surplus  income  unreservedly  to 
the  alleviation  of  such  cases  of  extreme  or  grave 
need  as  come  under  his  notice.  Now  it  can  scarcely 
be  doubted  that  a  large  section,  perhaps  a  majority 
of  the  laborers  who  get  less  than  a  Living  Wage  are 
in  grave  need  as  this  phrase  is  understood  by  the 
moral  theologians ;  for  to  be  without  the  minimum 
requisites  of  decent  and  humane  living  is  certainly 
as  great  an  evil  as  the  inability  to  live  according  to 
one's  social  position,  which  the  theologians  use  to 
illustrate  their  meaning.  "Necessitas  gravis"  is  not 
too  strong  to  describe  the  distress  endured  by  per- 
sons whose  habitual  condition  is  to  be  insufficiently 
fed,  clothed,  housed,  and  provided  against  sickness 
and  old  age.  Consequently  the  doctrine  of  the  moral 
theologians  seems  to  be  in  substantial  accord  with 
the  views  of  Mr.  Carnegie  and  Father  Garriguet. 
Obviously  the  obligation  of  distributing  super- 
^  Cf.  Bouquillon,  "De  Virtutibus  Theologicis,"  pp.  343,  344- 
275 


A     LIVING    WAGE 

fluous  goods  among  the  underpaid  workers  would 
not,  except  in  extreme  cases,  be  wisely  discharged 
by  direct  gifts  of  money.  These  would  tend  not 
only  to  pauperize  the  recipients  but  to  deter  the  em- 
ployer and  the  consumer  from  making  any  effort  to 
improve  existing  wage  conditions.  Inefficient  re- 
muneration can  be  effectively  supplemented  by  phil- 
anthropy only  through  methods  that  reach  this  end 
indirectly,  A  few  such  methods  may  be  mentioned 
here.  The  underpaid  could  be  financially  assisted 
to  organize  and  maintain  Labor  Unions.  "The  great 
problem  of  poverty,"  says  John  A.  Hobson,  "resides 
in  the  conditions  of  the  low-skilled  workman.  To 
live  industrially  under  the  new  order  he  must  organ- 
ize. He  cannot  organize  because  he  is  so  poor;  so 
ignorant ;  so  weak.  Because  he  is  not  organized  he 
continues  to  be  poor,  ignorant,  and  weak.  Here  is 
a  great  dilemma,  of  which  whoever  shall  have  found 
the  key  will  have  done  much  to  solve  the  problem  of 
poverty."  ^  Two  of  these  obstacles  to  organization, 
namely,  poverty  and  weakness,  would  be  very  con- 
siderably reduced  if  means  were  available  for  the 
support  of  organizers,  the  renting  of  halls  for  meet- 
ings, the  maintenance  of  a  reserve  fund,  and  for 
various  other  expenditures  that  are  essential  to  effi- 
cient organization.  Then,  there  is  the  matter  of  in- 
dustrial education,  provision  for  which  is  so  meagre 
in  America,  and  so  inferior  to  that  of  some  European 
countries.  ^      Greater    opportunities    of    industrial 

^  "Problems  of  Poverty,"  p.  227. 

^  Cf.  "Labor  Problems,"  by  Adams  and  Sumner,  ch.  XI ;  The 
Seventeenth  Annual  Report  of  the  Commissioner  of  Labor ; 
and  vol.  xxiii  of  U.  S.  Consular  Reports,  "Industrial  Educa- 

276 


OBLIGATION      OF     THE      CAPITALIST 

training  would  enable  many  young  persons  to  rise 
who  under  present  conditions  must  enter  the  ovtr- 
crowded  ranks  of  the  unskilled,  and  thus  diminish 
both  the  number  of  and  the  competition  among  the 
underpaid.  In  the  third  place,  attention  may  be 
called  to  the  unlimited  amount  of  good  that  couid 
be  accomplished  through  the  building  and  main- 
tenance of  hospitals  for  the  treatment  of  insufficiently 
remunerated  laborers  and  their  families.  Sickness 
always  means  distress,  and  it  comes  at  some  time  or 
other  to  all;  but  among  the  poor  it  is  exceptionally 
frequent  and  exceptionally  burdensome  and  disas- 
trous. "Unnecessary  disease  and  death  are  mainly 
active  in  bringing  misery  to  the  working  classes  and 
especially  to  those  in  poverty.  The  well-to-do  class- 
es are  relatively  free  from  preventable,  disease-pro- 
ducing conditions  of  work  and  of  living."  "To  the 
poor  sickness  means  more  than  illness.  It  means  mis- 
ery of  the  severest  kind."  "Sickness  assumes  a  new 
and  more  terrible  meaning  when  one  realizes  that  the 
mass  of  wage-earning  families  are  pathetically  de- 
pendent upon  some  one  person's  health."  "It  is  a 
fertile  and  lively  cause  of  poverty,  constantly  active 
and  supremely  powerful."  "Among  10,000,000 
well-to-do  persons  the  number  of  yearly  deaths  is 
probably  not  more  than  100,000 ;  among  the  highest 
class  of  wage  earners  the  number  is  probably  not  less 
than  150,000;  and  among  the  poorest,  or  those  in 
poverty,  the  number  is  probably  not  less  than  350,- 
000."^  Adequate  hospital  accommodations  and  pro- 

tion  and  Industrial  Conditions  in  Germany." 

^  From  chapter  IV  of  Robert  Hunter's  "Poverty." 
277 


A    LIVING    WAGE 

vision  for  efficient  nursing  in  the  home,  would  miti- 
gate and  lessen  these  evils  indefinitely.  Finally,  there 
is  a  method  that  would  perhaps  be  more  direct  and 
more  immediately  fruitful  than  any  of  those  already 
mentioned.  "The  overcrowding  of  the  population  on 
the  acre  in  certain  sections  of  Chicago  exceeds  that 
of  the  densest  portions  of  London.  In  New  York 
the  conditions  are  three  times  as  bad  as  they  are  in 
London."  "There  are  about  360,000  dark  rooms  in 
Greater  New  York."^  An  investigation  made  a  few 
years  ago  in  Boston  showed  .that  twelve  per  cent,  of 
the  total  number  of  persons  in  rented  tenements,  or 
37,613  persons,  lived  in  habitations  "having  poor  or 
bad  outside  sanitary  conditions."  ^  From  the  tables 
of  the  Sixth  and  Seventh  Annual  Reports  of  the 
Commissioner  of  Labor  it  is  seen  that  out  of  2,954 
families  in  the  cotton  and  woolen  industries  538 
lived  in  houses  the  average  size  of  which  was  less 
than  four  rooms,  and  that  only  592  out  of  1,782 
families  in  the  iron  and  steel  industries  occupied 
dwellings  averaging  four  rooms  or  more  each.  Con- 
sidered from  the  viewpoint  of  comfort,  health,  or 
morality,  the  housing  of  working  people  constitutes 
one  of  the  most  acute  and  difficult  of  our  modern 
social  problems.  It  provides  a  most  fruitful  field 
for  philanthropic  and  charitable  effort.  Money  ex- 
pended to  enable  the  underpaid  laborers  to  become 
the  possessors  and  owners  of  decent,  comfortable, 
and  sanitary  homes  would  contribute  more  effective- 
ly to  their  permanent  economic  and  moral  better- 

^  "Poverty,"  pp.  342-344. 

'  Eighth  Special  Report  of  the  Commissioner  of  Labor,  p. 
421. 

278 


OBLIGATION      OF      THE      CAPITALIST 

ment  than  any  other  work  of  benevolence  that  could 
be  undertaken.  The  worker  would  not  be  utterly 
helpless ;  he  would  have  at  least  a  place  of  shelter 
and  a  foothold  in  the  struggle  for  existence.  The 
resulting  gain  in  health,  energy,  courage,  and  am- 
bition would  aid  him  very  materially  in  resisting  the 
forces  that  threaten  to  press  him  down,  and  in  his 
attempts  to  rise  above  his  present  level.  This  is  a 
consideration  of  the  gravest  importance ;  for  in  the 
words  of  Professor  Walker :  "Nothing,  economical- 
ly speaking,  can  save  industrial  society  from  pro- 
gressive degradation  except  the  spirit  and  the  power 
in  the  working  classes  to  resist  being  crowded 
down."  ^ 

In  these  methods  the  loan  capitalist  and  the  land- 
owner who  profit  directly  by  tl.^  existence  of  insuffi- 
cient wages  will  find  ample  opportunity  to  discharge 
the  obligations  that  arise  out  of  this  condition.  And 
their  obligations  would  seem  to  be  graver  than  the 
obligation  resting  upon  the  man  of  wealth  who 
stands  in  no  such  relation  to  the  underpaid  laborer. 
The  duty  of  the  latter  is  solely  one  of  charity,  while  the 
duty  of  the  loan-capitalist  and  the  landowner  seems,  as 
abready  explained,  to  partake  of  the  nature  of  justice. 

Note  to  Second  Edition. — To  say  that  the  em- 
ployer is  obliged  to  forego  interest  on  his  investment 
until  he  has  paid  a  Living  Wage,  while  the  loan- 
capitalist  is  free  from  such  obKgation,  is,  indeed,  to 
put  the  former  at  a  disadvantage;  but  the  balance 
is  restored  in  the  statement  that  the  loan-capitalist  is 
obliged  to  help  the  needy  laborers  in  some  other  way. 

^ "  Elements  of  Political  Economy,"  p.  266. 
279 


CHAPTER  XVII 


The  Obligation  of  the  Laborer 

The  limitation  o£  their  number  by  the  underpaid.  It 
would  increase  the  demand  for  their  kind  of  labor,  but  in 
the  concrete  it  means  immoral  practices  and  anti-social 
consequences.  And  it  misplaces  the  responsibility  for  low 
wages.  To  increase  productive  efficiency,  and  therefore 
wages,  is  impracticable,  except  for  a  few  individuals. 
Saving  and  total  abstinence  could  raise  but  a  small  section 
of  the  underpaid  to  the  level  of  a  Livmg  Wage.  Organi- 
zation, while  most  effective  among  the  better-paid,  can  ac- 
complish much  even  for  the  poorest-paid. 

Having  considered  the  obligations  of  all  the  other 
economic  classes  relatively  to  the  right  to  a  Living 
Wage  and  to  the  existence  of  insufficient  wages,  let 
us  glance  briefly  at  the  responsibility  and  obligation 
of  the  laborer  himself.  What  can  the  underpaid 
worker  do  to  raise  himself  to  the  plane  of  a  decent 
livelihood  ? 

A  remedy  for  low  wages  that  has  for  a  long  time 
been  recommended  to  the  laborer,  especially  by  econ- 
omists, is  the  practice  of  what  is  somewhat  euphe- 
mistically termed  "sexual  self-restraint."  ^     Former- 

*  Cf.  Malthus,  "Essay  on  Population,"  Bk.  IV,  chs.  I-V ; 
Roscher,  "Political  Economy,"  sec.  163  :  Mill,  "Principles  of 
Political  Economy,"  Bk.  II,  ch.  XII ;  Hadley,  "Economics," 
sees.  355-357- 

280 


OBLIGATION    OF    THE    LABORER 

ly  it  was  preached  to  all  sections  of  the  laboring  pop- 
ulation, but  it  seems  to  be  no  longer  thought  neces- 
sary to  the  welfare  of  the  better-paid  classes.  All 
the  evidence  at  hand  seems  to  show  that  these  re- 
produce much  less  rapidly  than  the  poorest  classes.  ^ 
Throughout  Northwestern  Europe  there  has  oc- 
curred during  the  last  thirty  years  a  steady  decline 
in  the  birth-rate,  but  only  among  those  workers  who 
are  above  the  level  of  bare  subsistence.  If  every- 
day observation  may  be  relied  upon,  the  same  condi- 
tions obtain  in  America.  It  is  the  more  prosperous 
laborers  that  are  consciously  restricting  their  num- 
bers, by  marrying  later  and  by  reducing  the  size  of 
their  families.  While  denying  that  the  larger  com- 
forts enjoyed  by  the  better-paid  is  the  cause  of  the 
lower  birth-rate  prevailing  among  them,  President 
Hadley  admits  that  high  comfort  and  low  birth-rate 
commonly  go  together.  ^  It  would  seem  that  the 
economically  degraded  propagate  rapidly  through 
utter  lack  of  ambition  and  a  feeling  of  hopelessness.^ 
The  result  is  that  their  kind  of  labor,  unskilled 
labor,  continues  to  be  excessively  plentiful  relatively 
to  the  demand  for  it.  Hence  the  vital  importance 
of  lessening  its  supply  through  a  diminished  birth- 
rate. 

Considered  apart  from  its  moral  and  social  conse- 
quences, this  remedy  would  undoubtedly  be  highly 
efficacious.  Other  conditions  remaining  the  same, 
the  wages  of  a  group  fall,  or  tend  to  fall,  at  every 

*  See    the    very    significant    statistics    cited   in   "Industrial 
Democracy,"  pp.  632-642,  ist  ed. 
^"Economics,"  sec.  57. 

'Walker,  "Elements  of  Political  Economy,"  p.  267. 
281 


A    LIVING    WAGE 

addition  to  its  membership,  and  rise,  or  tend  to  rise, 
whenever  increasing  supply  fails  to  keep  pace  with 
increasing  demand.  If  the  laborers  in  the  lowest- 
paid  groups  should  confine  the  number  of  their  off- 
spring within  sufficiently  narrow  limits,  the  genera- 
tion succeeding  to  their  tasks  would  certainly  be  able 
to  command  living  wages.  It  is  a  simple  question 
of  the  quantative  relation  between  demand  and  sup- 
ply. Walker  was  so  thoroughly  convinced  of  the 
necessity  and  utility  of  the  measure  that  he  recom- 
mended the  strengthening  and  development  of  any 
economic  desire  that  would  crowd  out  the  desire  to 
propagate.  "Almost  anything  is  better  than  that 
the  desire  to  propagate  should  not  be,  by  some  cause, 
restrained."  ^ 

As  to  the  morality  of  this  recommendation,  it 
must  be  noted  in  the  first  place  that  the  laborer  is 
not,  as  is  so  frequently  assumed,  bound  by  any  obli- 
gation of  justice  to  follow  it..  The  man  who  marries 
and  brings  into  the  world  children  whom  he  cannot 
maintain  in  the  minimum  conditions  of  decency,  will 
sometimes  sin  against  prudence,  but  he  violates  no 
rights,  either  of  his  wife,  his  offspring,  or  his  fellow 
laborers  of  the  group  to  which  he  belongs.  His 
wife  freely  consents  to  the  union;  his  unborn  chil- 
dren have  no  rights  sufficiently  potent  to  annul  his 
right  of  fatherhood ;  and  the  right  of  his  fellow 
workingmen  to  the  larger  advantages  that  they  would 
obtain  if  fewer  children  were  born  to  the  group,  is 
inferior  to  his  right  to  become  the  head  of  a  family. 
Indeed,  it  is  doubtful  whether  even  charity  toward 

*  "Elements  of  Political  Economy,"  p.  296. 
282 


OBLIGATION     OF    THE     LABORER 

his  children  or  his  fellows  obliges  the  laborer  to 
forego  the  advantages  and  consolations  of  family 
life  in  order  that  the  hand  of  social  injustice  may- 
fall  less  heavily  upon  them.  It  would  seem  that 
charity  does  not  bind  at  the  cost  of  such  great  per- 
sonal inconvenience. 

Generally  speaking,  the  underpaid  laborer  is  not 
only  not  obliged  to  abstain  from  or  indefinitely  post- 
pone marriage,  or  to  limit  the  number  of  his  off- 
spring, but  is  under  obligation  to  do  the  very  oppo- 
site. Theoretically  and  hypothetically,  these  meth- 
ods of  preventing  an  over-supply  of  low-paid  labor- 
ers are  excellent ;  human  nature  being  what  it  is, 
they  mean  in  actual  life  immoral  practices  and  anti- 
social consequences.  The  great  majority  of  men 
find  it  extremely  difficult  to  forego  marriage  or 
deliberately  to  postpone  it  for  a  long  time,  and  remain 
chaste.  No  man  who  is  acquainted  with  the  lessons 
of  history  and  observant  of  the  ordinary  and  obvious 
facts  of  the  life  about  him  will  question  this  state- 
ment. The  practice  of  limiting  the  number  of  chil- 
dren is  immoral  because  in  the  overwhelming  ma- 
jority of  cases  it  is  accomplished  by  means  of  un- 
healthful  and  unnatural  actions.  Reputable  physi- 
cians are  unanimous  in  pronouncing  these  disgust- 
ing devices  a  serious  menace  to  health,  while  the 
moralist  condemns  them  as  frequently  criminal,  /.  e., 
the  murder  of  the  unborn  offspring,  and  always  per- 
verse and  degrading.  They  are  perverse,  inasmuch 
as  they  defeat  the  primary  end  of  marriage,  conflict 
with  the  standard  of  action  decreed  by  nature,  and 
permit  the  beast  in  man  to  triumph  over  his  higher 
283 


A    LIVING    WAGE 

self;  and  they  are  degrading,  inasmuch  as  they 
brutalize  the  most  sacred  of  marital  relations,  con- 
verting husband  and  wife  from  co-workers  with  the 
Creator  into  instruments  of  mutual  gratification. 

These  precautionary  measures  are  hurtful  to  so- 
ciety because  they  promote  egotism  and  enervating 
self-indulgence  among  all  classes,  the  unmarried,  the 
parents,  and  the  children  and  because  they  portend 
a  stagnant  or  even  a  declining  population.  The 
average  man  who  refuses  to  marry,  or  who  indef- 
initely postpones  marriage  from  a  disinclination  to 
assume  its  burdens  or  a  love  of  personal  "independ- 
ence," deprives  himself  of  one  of  the  most  effective 
means  of  developing  the  finer  side  of  character.  He 
becomes  self-centered  and  unsympathetic,  and,  gen- 
erally speaking,  is  a  poorer  type  of  citizen  than  the 
man  who  becomes  the  head  of  a  family  before  he 
reaches  middle  age.  Only  in  the  family  is  it  possi- 
ble for  the  majority  of  men  to  develop  those  social 
feelings  that  are  essential  to  the  welfare  of  a  demo- 
cratic society.  And  the  deliberate  restriction  of  the 
number  of  offspring  fosters  in  the  parents  a  love  of 
material  goods  and  a  self-indulgence  which  are  fatal 
to  moral  and  intellectual  improvement,  while  it  re- 
sults in  children  who  are  over-indulged  and  under- 
disciplined,  and  who  as  men  and  women  will  be  even 
more  devoted  than  their  parents  to  selfish  and  mate- 
rialistic ideals.  As  President  Roosevelt  declared  in 
his  famous  letter  on  "race  suicide,"  and  later  on  in 
his  address  to  a  meeting  of  mothers :  "If  the  men  of 
the  nation  are  not  anxious  to  work  in  many  different 
ways,  with  all  their  might  and  strength,  and  ready 
284 


OBLIGATION     OF    THE    LABORER 

and  able  to  fight  at  need,  and  anxious  to  be  fathers  of 
families,  and  if  the  women  do  not  recognize  that  the 
greatest  thing  for  any  woman  is  to  be  a  good  wife  and 
mother,  why,  that  nation  has  cause  to  be  alarmed 
about  its  future."  "The  way  to  give  a  child  a  fair 
chance  in  life  is  not  to  bring  it  up  in  luxury,  but  to 
see  that  it  has  the  kind  of  training  that  will  give  it 
strength  of  character."  The  practice  of  the  small- 
family  cult  tends  inevitably  to  a  society  whose  mem- 
bers will  be  incapable  of  that  degree  of  self-sacrifice 
without  which  mental  and  moral  progress  are  im- 
possible ;  nay,  more,  to  a  society  that  will  be  mental- 
ly, morally,  and  physically  decadent.  The  disastrous 
effects  of  the  practices  that  we  are  considering  on 
the  movement  of  population  are  already  manifest. 
A  noted  economist  had  advocated  the  importation  of 
French  Canadians  to  replenish  the  national  stock  of 
France.  According  to  Sidney  and  Beatrice  Webb, 
"the  dangers  to  be  apprehended  in  Northwestern 
Europe  is  not  over-population  at  all,  but  a  deliberate 
restriction  of  population  by  the  prosperous,  more 
intelligent,  and  more  thrifty  sections."  ^  The  low 
birth-rate  among  families  of  native  American  parent- 
age, to  which  writers  have  frequently  called  attention 
of  late,  is  nothing  less  than  startling,  "The  rate  of 
child-birth  has  been  decreasing with  astonish- 
ing rapidity among  the  native  American-born 

of  our  population,  until  it  has  reached  a  minimum ; 
the  number  of  children  to  the  native  American  fam- 
ily of  all  classes  (and  in  this  lies  the  danger)  being 
less  than  it  is  in  any  other  country,  France  even  not 
^"Industrial  Democracy,"  p.  641,  26.  ed. 
285 


ALIVINGWAGE 

excepted,  which  has  long  been  known  to  be  at  the 

point  of  stagnation Less  than  two  surviving 

offspring  to  reproduce  the  race  for  all  native-Amer- 
ican marriages."  *  Nor  is  this  the  whole  story. 
Notwithstanding  the  assertions  of  apologists  for  the 
foreign-born  couples,  honest  and  intelligent  observa- 
tion shows  that  a  considerable  and  rapidly  growing 
section  of  these  are  zealous  imitators  of  the  example 
set  by  the  native-born.  Let  the  reprehensible  prac- 
tice be,  as  some  of  the  economists  urge,  generally 
adopted  by  the  underpaid  workers,  native  and 
foreign-born,  and  we  shall  soon  be  compelled  to  con- 
template a  stationary  if  not  a  declining  population. 

Even  from  the  purely  economic  point  of  view,  the 
remedy  under  discussion  is  of  questionable  value. 
"Slow  growth  of  population  and  quick  growth  of 
capital,"  says  Professor  Clark,  "offer  the  conditions 
of  rapidly  increasing  welfare  for  the  working  class- 
es." ^  This  statement  ignores  the  fact  that  the  de- 
sire to  become  the  head  of  a  family  and  the  necessity 
of  providing  for  wife  and  offspring,  are  two  very 
strong  incentives  to  the  expenditure  of  productive 
energy  and  the  accumulation  of  capital.  On  the 
other  hand,  the  selfishness  fostered  by  aversion  to 
marriage  and  parenthood  tends  naturally  toward 
indolence  and  inertia. 

The  preaching  of  the  doctrine  of  "sexual  self-re- 
straint" hinders  a  proper  appreciation  by  the  public 
of  the  true  character  and  causes  of  the  evil  of  in- 

^  Dr.  George  J.  Engelmann  in  "Popular  Science  Monthly." 
June,  1903. 

^"Publications  of  the  American  Academy  of  Political  and 
Social  Science,"  No.  3,  p.  2.2. 

286 


OBLIGATION    OF    THE    LABORER 

sufficient  wages,  and  obscures  the  responsibility  of 
society  and  the  necessity  of  social  action.  ^  It  like- 
wise soothes  the  consciences  of  those  individuals 
who  are  at  fault,  and  shifts  the  blame  to  the  shoulders 
of  the  innocent.  Professor  Ingram  tells  us  that  the 
teaching  of  Malthus  found  favor  in  certain  quarters 
because  it  "tended  to  relieve  the  rich  and  powerful 
from  responsibility  for  the  condition  of  the  working 
classes,  by  showing  that  the  latter  had  chiefly  them- 
selves to  blame,  and  not  either  the  negligence  of 
superiors  or  the  institutions  of  the  country."  -  A 
similar  statement  would  hold  true  of  some  of  the 
advocates  of  the  milder  form  of  Malthusianism  that 
is  preached  to-day. 

It  is  sometimes  asserted  that  the  underpaid  laborer 
could  secure  an  increase  of  remuneration  by  increas- 
ing his  productive  efficiency.  Let  him  perform  more 
effectively  his  present  task,  and  also  endeavor  to  fit 
himself  for  something  higher.  The  adoption  of  the 
former  practice  would  mean  an  addition  to  the  profits 
of  the  business,  and  the  possibility  of  additional  com- 
pensation for  the  workers.  The  employer  might,  in- 
deed, insist  on  retaining  all  the  extra  gain,  but  he 
could  not  resist  the  temptation  to  increase  the  total 
additional  profit  by  enlarging  the  number  of  his 
employees.  Thus  a  rise  in  wages  would  be  inevit- 
able, owing  to  the  rise  in  the  demand  for  labor.  As 
the  theory  is  frequently  put,  the  laborer  would  get 
more  because  he  produced  more.  The  first  objec- 
tion to  this  proposal  is  drawn  from  the  fact  that  a 

*  Cf .  Maurice  Block,  "Les  progres,"  p.  578. 
'"History  of  Political  Economy,"  p.  121. 

287 


A    LIVING    WAGE 

large  proportion  of  the  low-paid  workers  are  phys- 
ically unable  to  put  forth  greater  productive  energy ; 
in  their  case  increased  efficiency  must  be  related  to 
better  wages  as  effect  rather  than  as  cause.  Second- 
ly, the  attempt  would  be  almost  wholly  ineffective 
unless  it  were  made  by  all,  or  at  least,  by  a  majority 
of  the  laborers  concerned;  otherwise  the  increased 
competition  for  labor  among  employers  would  not 
be  sufficient  to  cause  a  general  rise  in  remuneration. 
The  gains  resulting  from  individual  and  isolated 
efforts  to  increase  productive  efficiency  would  be 
nearly  all  secured  by  individual  employers.  Now  to 
assume  that  the  great  majority  of  the  underpaid 
workers  could  be  induced  simultaneously  to  enlarge 
their  productive  output,  is  to  look  for  a  unanimity  of 
action  that  no  practical  man  would  venture  to  hope 
for  in  the  case  of  any  other  social  group.  The  first 
condition  of  the  success  of  any  such  attempt  would 
be  a  strong  and  numerically  complete  organization; 
but  if  this  class  of  laborers  were  thoroughly  organ- 
ized they  could  probably  obtain  a  Living  Wage  with- 
out increasing  their  productive  efficiency.  Even  if 
the  desired  unanimity  of  action  were  secured  the 
results  would  perhaps  be  disappointing.  The  en- 
larged product  might  be  more  than  sufficient  to  pro- 
vide all  the  producers  with  a  Living  Wage  if  it  sold 
at  the  old  prices,  but  experience  shows  that  this  con- 
dition would  not  be  realized.  The  lower  selling 
price  of  the  product  might  justify  only  a  very  slight 
increase  in  wages.  All  would  depend  on  the  ratio 
that  would  exist  between  the  reduction  in  price  and 
the  increase  in  output.  Thus,  a  mere  statement  of 
288 


OBLIGATION    OF    THE    LABORER 

the  limitations  of  this  proposal  is  sufficient  to  expose 
its  weakness  as  a  general  remedy. 

The  recommendation  that  underpaid  laborers 
should  fit  themselves  for  some  higher  kind  of  work 
has  some  value  in  the  case  of  individuals.  Undoubt- 
edly there  are  many  men  in  the  ranks  of  the  un- 
skilled who  could  accomplish  something-  in  this  di- 
rection if  only  they  were  a  little  more  energetic,  a  lit- 
tle more  ambitious,  a  little  more  hopeful.  The  ob- 
stacles to  be  overcome,  however,  bulk  so  large  in  the 
eyes  of  the  worker  that  the  plan  is  practicable  for 
only  a  few. 

The  practice  of  thrift  and  saving  is  another  sug- 
gestion that  is  frequently  urged.  Speaking  general- 
ly, this  advice  is  good  for  all  classes  of  men,  but  only 
within  certain  limits.  There  is  such  a  thing  as  over- 
thriftiness  and  excessive  saving,  which  are  harmful 
alike  to  the  individuals  practising  them  and  to  the 
activity  of  production  and  industry.  Waiving  this 
consideration,  we  can  readily  admit  the  great  ad- 
vantage to  be  derived  from  the  possession  of  a  per- 
sonal reserve  fund.  It  helps  the  workingman  to 
change  his  employment  or  his  location  whenever  he 
becomes  aware  of  better  opportunities  elsewhere,  en- 
ables him  to  remain  idle  rather  than  immediately  ac- 
cept the  terms  offered  by  the  employer,  and  increas- 
es his  bargaining  power  generally.  For  the  major- 
ity of  the  underpaid,  however,  saving  to  a  degree 
that  would  be  effective  supposes  an  unusual  measure 
of  self-sacrifice,  and  cannot  be  regarded  as  a  practic- 
able method  of  betterment.     It  will  be  efficacious 

19  289 


A    LIVING    WAGE 

chiefly  in  the  case  of  individuals  among  the  un- 
married. 

A  particular  form  of  saving  that  is  sometimes 
recommended  with  the  utmost  earnestness  is  ab- 
stinence from  intoxicating  drink.  It  is  undeniable 
that  the  number  of  laborers,  both  well-paid  and 
underpaid,  who  are  reduced  to  a  condition  of  eco- 
nomic wretchedness  by  this  species  of  indulgence,  is 
deplorably  large.  And  yet,  even  universal  total 
abstinence  would  go  but  a  little  way  toward  im- 
proving the  standard  of  living  of  the  underpaid 
workers.  It  would  be  very  effective  in  those  indi- 
viduals whose  expenditure  for  intoxicating  drink  is 
considerably  above  the  average,  but  for  the  whole 
class  it  would  realize  only  a  small  fraction  of  the 
claims  made  by  its  more  enthusiastic  advocates.  The 
average  amounts  expended  annually  for  intoxicating 
liquors  by  families  in  certain  industries  are  submit- 
ted in  proof  of  this  statement :  * 


Industry 

Income 

Expenditure  per 

per  family 

family  for  drink 

Pig  Iron 

$591.61 

$17.61 

Bar  Iron 

784.11 

25.10 

Steel 

663.56 

26.55 

Bituminous  Coal 

550.30 

18.09 

Coke 

572.57 

20.25 

Iron  Ore 

401.65 

8.58 

Cotton 

637.76 

15-98 

Woolen 

663.13 

18.39 

Glass 

859.64 

54.84 

^  Seventh  Annual  Report  of  the  Commissioner  of  Labor,  pp. 
854-857. 

290 


OBLIGATION    OF    THE    LABORER 

From  this  table  it  appears  that  the  group  of  fam- 
ilies whose  income  was  lowest,  $401.65,  had  by  far 
the  smallest  average  expenditure  for  intoxicants, 
$8.58 ;  that  the  outlay  of  the  four  groups  of  families 
whose  annual  income  fell  short  of  $600  averaged 
only  $16.13  for  this  purpose;  and  that,  with  the  ex- 
ception of  those  in  the  glass  industry,  none  of  the 
families  in  receipt  of  a  higher  income  were  very  ex- 
travagant in  the  matter.  Now  if  the  four  groups  of 
families  just  mentioned  are  typical  of  the  underpaid 
workers  generally,  it  is  certain  that  the  practice  of 
total  abstinence  would  not  elevate  them  as  a  class  to 
the  conditions  of  a  decent  livelihood,  nor  bring  the 
lowest  sections  of  them  out  of  poverty  into  meager 
comfort.  An  addition  of  $16.13  to  the  annual  in- 
come of  the  families  of  all  the  underpaid  would  still 
leave  thousands  of  them  below  the  level  of  reason- 
able living. 

Finally,  there  is  the  method  of  betterment  fur- 
nished by  organization.  A  formal  defence  of  the 
necessity  and  utility  of  the  Labor  Union  is  happily  no 
longer  necessary.  The  features  of  our  industrial 
system  that  render  organized  action  indispensable  to 
the  welfare  of  the  laborer,  and  the  large,  numerous, 
and  varied  gains  that  organization  has  brought  him, 
are  so  obvious  that  only  the  densely  ignorant  or  the 
hopelessly  prejudiced  can  escape  their  cogency. 
Economists  no  longer  warn  workingmen  that  all 
combinations  entered  into  for  the  purpose  of  raising 
wages  must  necessarily  and  inevitably  prove  futile. 
"Thus,  economic  authority  to-day,  looking  back  on 
the   confident   assertions   against  Trade    Unionism 

291 


A    LIVING    WAGE 

made  by  M'Culloch  and  Mill,  Nassau  Senior  and 
Harriet  Martineau,  Fawcett  and  Cairnes,  has  humbly 
to  admit,  in  the  words  of  the  present  occupant  of 
the  chair  once  filled  by  Nassau  Senior  himself,  that 
'in  the  matter  of  Unionism,  as  well  as  in  that  of  the 
predeterminate  wage-fund,  the  untutored  mind  of 
the  workman  has  gone  more  straight  to  the  point 
than  economic  intelligence  misled  by  a  bad  meth- 
od.' "  ^     Professor  T.  S.  Adams  maintains,  indeed, 
that:  "The  majority  of  economists  have  never  been 
'against  the  Union,'  and  to-day  professional  econo- 
mists are  practically  unanimous  in  maintaining  the 
usefulness  and  even  the  necessity  of  rationally  con- 
ducted Unions."  ^  And  the  economic  justification  of 
organization  is  well  stated  by   Professor  Adams: 
"There  is  then  an  indeterminate  share  in  the  product 
of  industry  which  goes  to  the  factor  possessing  the 
greatest     bargain-power.      Successful     bargaining 
depends  largely  upon  two  attributes,  commercial  in- 
stinct in  estimating  the  highest  bid  that  your  antag- 
onist can  make,  and  the  material  power  of  holding 
out  until  he  is  forced  to  make  that  bid.     It  needs  no 
discussion  to  show  that  the  isolated  laborer  is  woeful- 
ly lacking  in  both  these  attributes.  He  does  not  know 
what  the  employer  can  afiford  to  bid,  and  his  mate- 
rial wants  are  so  pressing  that  he  cannot  afford  to 
hold  out  until  the  employer's  most  liberal  terms  are 
forthcoming.     'In  the  long  run,'  said  Adam  Smith, 
'the  workman  may  be  as  necessary  to  his  master  as 

^"Industrial  Democracy,"  p.  653,  ist  ed. 
*  "Labor  Problems,"  p.  241. 

292 


OBLIGATION     OF    THE     LABORER 

his  master  is  to  him,  but  the  necessity  is  not  so  im- 
mediate.' "  ^  That  organization  has  fulfilled  in 
practice  the  expectations  of  theory  is  sufficiently  indi- 
cated in  the  following  excerpt  from  the  Final  Report 
of  the  Industrial  Commission:  "An  overwhelming 
preponderance  of  testimony  before  the  Industrial 
Commission  indicates  that  the  organization  of  labor 
has  resulted  in  a  marked  improvement  in  the 
economic  condition  of  the  workers."  - 

The  effectiveness  of  organization  is  naturally 
greatest  where  it  is  least  needed,  in  the  higher  groups. 
Here  the  workers  are  more  intelligent,  more  self- 
confident,  more  ambitious,  more  closely  associated 
in  their  work,  better  equipped  financially  to  main- 
tain an  effective  organization,  and  less  exposed  to 
competition  from  without.  Among  the  poorest  sec- 
tions of  the  underpaid  the  obstacles  in  the  way  of 
organization  are  enormous.  These  workers  are 
very  frequently  deficient  in  the  intelligence,  self- 
restraint,  and  mutual  trustfulness  that  are  essential 
to  the  initiation  and  maintenance  of  concerted  ac- 
tion. Long  hours  at  work  and  insufficient  nutrition 
deprive  them  of  that  leisure  and  energy  that  are  in- 
dispensable to  the  effective  prosecution  of  the  routine 
work  of  an  association.  Scanty  wages  render  ex- 
ceedingly difficult  the  accumulation  of  a  reserve 
fund.  The  permanency  of  any  organization  that 
they  may  form  is  threatened  by  the  insecure  char- 
acter of  their  employment ;  for  their  places  can 
usually  be  readily  filled  from  the  ranks  of  the  unem- 

*  "Labor  Problems,"  p.  242. 
'p.  802. 

293 


A    LIVING    WAGE 

ployed.  The  last  condition  is,  in  the  opinion  of 
Sidney  and  Beatrice  Webb,  of  itself  sufficient  to 
render  organization  valueless  for  the  unskilled. 
"There  is,  in  fact,  for  unspecialized  manual  labor  a 
practically  unlimited  'reserve  army'  made  up  of  the 
temporarily  unemployed  members  of  every  other 
class.  As  these  form  a  perpetually  shifting  body, 
and  the  occupation  of  'general  laboring'  needs  no 
apprenticeship,  no  combination,  however  co-exten- 
sive it  might  be  with  the  laborers  actually  employed 
at  any  one  time  could  deprive  the  employer  of  the 
alternative  of  employing  an  entirely  new  gang."  * 
They  refer  particularly  to  England  where  the  per- 
centage of  unempJoyment  is  much  greater  than  in 
the  United  States.  However,  even  John  Mitchell 
declares :  "It  must  be  admitted  that  this  problem  of 
the  unskilled  and  untrained  is  intensely  difficult,  and 
that  it  is  only  partially  solvable  by  direct  Trade  Union 
effort."  2 

Still  there  is  good  reason  to  believe  that  the  at- 
tempts of  even  the  poorest  and  weakest  of  the  un- 
skilled to  maintain  organizations  are  well  worth 
while  and  will  be  amply  justified  by  the  results. 
However  great  may  be  the  number  of  unemployed 
who  stand  ready  to  take  the  places  of  those  at  work, 
"there  will  always  be  a  certain  difficulty  and  loss  in 
replacing  a  united  body  of  employees  by  a  body  of 
outsiders,  though  the  working  capacity  of  each  new 
comer  may  be  equal  to  that  of  each  member  of  the 
former  gang."  ^     Compared  with  the  Unions  exist- 

^  "Industrial  Democracy,"  p.  758,  ist  ed. 
-"Organized  Labor,"  p.   168. 
^  Hobson,  "Problems  of  Poverty,"  p.  114. 
294 


OBLIGATION     OF     THE     LABORER 

ing  in  the  skilled  trades,  such  associations  as  the  low 
grade  and  low-paid  workers  can  support  are  neces- 
sarily feeble,  but  they  add  something  to  the  resisting 
power  of  the  individuals  who  enter  them.  This  in- 
crease in  fighting  strength  may  not  always  be  pro- 
ductive of  positive  gain,  but  it  is  usually  effective  in 
arresting  the  forces  that  otherwise  would  reduce  the 
workers  to  a  still  lower  level.  Organization,  more- 
over, is  frequently  the  means  of  compelling  the  pub- 
lic to  pay  some  attention  to  the  grievances  of  the  op- 
pressed laborer,  and  to  exert  its  influence,  which  is 
very  considerable,  for  reform.  And  the  results  of  past 
attempts  to  organize  effectively  the  class  that  we  are 
considering  have,  on  the  whole,  been  encouraging. 
"Trade  Unionism,"  says  John  Mitchell,  "has  been 
successful  in  raising  one  trade  after  another  from 
the  profound  slough  of  unskilled,  unorganized,  and 
unregulated  labor.  Much  work  which  was  former- 
ly absolutely  unskilled  and  at  which  men  were  em- 
ployed a  few  hours  at  a  time,  to  be  taken  on  or  dis- 
charged, fined  or  suspended  at  will,  has  now  become 
organized  so  that  the  men  secure  fair  wages,  and  by 
reason  of  that  very  fact  earn  and  deserve  them."^ 
Two  notable  examples  are  furnished  by  the  garment 
workers  and  the  anthracite  coal  miners.  The  former 
are  apparently  among  the  most  helpless  subjects  for 
organization,  and  yet  they  have  by  this  means 
achieved  very  substantial  gains.  ^  The  union  of  all 
the  classes  of  workers  employed  in  the  anthracite 
mining  industry  enabled  them  to  carry  on  two  great 

^  Op.  cit.,  p.  170. 

'  Cf.  "The  Sweating  System,"  by  Henry  White,  in  Bulletin 
No.  4  of  the  Bureau  of  Labor. 

295 


A    LIVING    WAGE 

strikes  within  two  years,  the  consequences  of  which 
were  an  immense  improvement  in  the  condition  of 
all  of  them,  from  the  highest  to  the  lowest.  This 
particular  Labor  Union  is  a  good  example  of  the  type 
of  organization  that  will  prove  most  effective  for  the 
underpaid.  The  Industrial  Union — so  called  be- 
cause it  embraces  all  the  employees  of  a  give  'n- 
dustry  instead  of  being  confined,  as  is  the  l^ade 
Union,  to  those  who  work  at  a  given  trade  or  occupa- 
tion— by  making  the  cause  of  any  one  section  the 
cause  of  all,  enables  the  low-paid  and  unskilled  to 
command  the  active  co-operation  of  the  higher 
groups,  and  therefore  to  increase  immeasurably  their 
fighting  power.  It  affords  a  splendid  opportunity 
to  the  workers  to  create  a  real  brotherhood  of  labor 
in  which  the  strong  will  help  to  bear  the  burdens  of 
the  weak.  And  present  indications  are  that  it  will 
before  long  become  the  prevailing  form  of  labor 
organization  in  America. 

Of  the  various  forms  of  self-help  discussed  in  this 
chapter,  "sexual  self-restraint"  is  in  practice  im- 
moral and  anti-social;  the  increase  of  productive 
efficiency,  the  practice  of  saving,  and  the  exercise 
of  temperance  are  more  or  less  effectual  in  individual 
cases ;  while  organization  provides  the  only  method 
from  which  anything  like  general  results  can  be  ex- 
pected. It  will  not  by  itself  obtain  a  Living  Wage 
for  all  the  underpaid,  but  it  will  accomplish  more  in 
this  direction  than  all  other  efforts  that  the  laborer 
can  make  put  together, 


2g6 


CHAPTER  XVIII 


The  Obligation  of  the  State 

The  policy  of  non-intervention  false  in  theory  and 
discredited  by  experience.  Concrete  eflfects  of  govern- 
mental restrictions.  As  the  protector  of  natural  rights, 
the  State  ought  to  compel  employers  to  pay  a  Living  Wage. 
Objections  to  the  economic  feasibility  of  a  Living  Wage. 
And  to  the  possibility  of  securing  it  by  legal  enactment. 
Minimum  wage  laws  are  already  in  operation  in  Victoria 
and  in  New  Zealand.  The  State  could  extend  the  Living 
Wage  principle  partially,  and  promote  it  indirectl}'. 

The  obligation  of  providing  the  laborer  with  a 
Living  Wage  has  been  fully  outlined  in  its  individ- 
ual and  class  aspects.  There  remains  only  the  ques- 
tion of  the  extent  to  which  it  rests  upon  the  State. 
That  baneful  heritage  of  the  eighteenth  century, 
the  doctrine  that  a  minimum  of  State  regulation  of 
industry  means  a  maximum  of  industrial  freedom 
for  the  individual,  no  longer  counts  any  considerable 
number  of  adherents.  It  is  demonstrably  false  in 
theory,  and  it  has  been  completely  discredited  in 
practice.  Negatively,  liberty  is  absence  of  restraint ; 
positively,  it  is  the  power  to  act  and  to  enjoy.  Now 
the  restraints  to  action  and  enjoyment  are  not  all 
political  and  legal ;  consequently  the  individual  may 
possess  the  fullest  immunity  from  governmental  in- 
297 


A    LIVING    WAGE 

terference,  and  yet  be  hindered  by  some  other  re- 
straints, such  as,  the  strength,  cunning,  or  selfish- 
ness of  his  fellows,  from  doing  and  enjoying  those 
things  that  are  essential  to  reasonable  life.  When- 
ever this  happens,  the  absence  of  State  intervention 
means  the  presence  of  insuperable  obstacles  to  real 
and  effective  liberty.  In  a  word,  political  and  legal 
freedom  are  not  an  adequate  safeguard  to  the  wel- 
fare of  the  individual.  As  the  Comte  de  Mun  told 
the  French  Chamber  of  Deputies :  "Liberty  does  not 
consist  in  a  theoretical  right,  but  in  the  possibility 
of  exercising  it.  The  power  to  be  free,  in  a  regime 
which  puts  the  workingman's  life  at  the  mercy  of 
supply  and  demand ;  which  exposes  himself,  his  wife, 
and  his  children  to  the  hardships  of  a  competition 
that  knows  no  moderation;  which  sets  no  limit  to 
his  exploitation  except  the  interests  of  those  who 
employ  him, — the  power  to  be  free  in  such  condi- 
tions, when  the  need  of  subsistence  is  so  pressing  as 
to  permit  of  no  waiting,  no  choice,  no  hesitation, 
does  not  exist  and  consequently  the  laborer  is  not 
free."  ^  The  economic  history  of  the  nineteenth 
century  furnishes  abundant  proof  of  these  state- 
ments, and  an  overwhelming  refutation  of  the  non- 
intervention theory.  Perhaps  the  clearest  and  most 
logical  instance  is  to  be  found  in  the  conditions  pre- 
vailing in  the  mines  and  factories  of  England  before 
the  passage  of  the  Factory  Acts.  ^ 

Some  of  the  opponents  of  State  intervention  in 

*  Cited  in  Max  Turman's  "Le  catholicisme  sociale,"  p.  loi. 
Cf.  the  excellent  analysis  in  chap.  XI  of  Ely's  "Evolution  of 
Industrial  Society." 

*  See  the  references  given  in  chapter  I. 

298 


OBLIGATION    OF    THE    STATE 

industry  may  be  conveniently  classed  with  the  juve- 
nile bully  who  resents  the  "interference"  of  parent  or 
teacher  in  his  relations  with  younger  and  weaker 
boys,  and  with  the  burglar  or  highwayman  who  ob- 
jects to  the  activity  of  the  policeman.  These  are 
the  possessors  of  superior  bargaining  power  who 
realize  that  if  government  will  only  let  them  alone 
they  will  be  able  successfully  to  exploit  their  weak- 
er fellows.  Their  opposition  is  natural  in  the  same 
sense  that  selfishness  is  natural.  Those  who  op- 
pose State  regulation  of  industry  on  higher  grounds 
than  self-interest  usually  misconceive  its  concrete 
efifects.  From  this  point  of  view,  laws  may  b^ 
divided  into  two  classes :  Those  w^hich  actually  re- 
strict the  liberty  of  all  or  a  majority  of  the  citizens; 
and  those  which  limit  the  freedom  of  all  potentiallv, 
but  of  only  a  few  actually.  The  first  class  regulates 
the  simpler,  more  frequent,  and  more  general  activi- 
ties of  everyday  life,  and  puts  some  practical  restric- 
tion on  the  freedom  of  nearly  every  person.  Yet 
they  bring  to  him  more  freedom  than  they  take  away. 
For  example,  the  ordinance  forbidding  a  man  to 
monopolize  the  street  or  the  sidewalk  curtails  to  that 
extent  his  liberty,  but  secures  him  the  larger  liberty 
of  immunity  from  the  inconvenience  that  would  be 
produced  by  similar  unreasonable  conduct  on  the 
part  of  his  fellows.  Jevons  has  well  said  that,  "the 
modern  English  citizen  who  lives  under  the  burden 
of  the  revised  edition  of  the  Statutes,  not  to  speak 
of  innumerable  municipal,  railroad,  sanitary,  and 
other  by-laws,  is  after  all  an  infinitely  freer  as  well 
as  nobler  creature  than  the  savage  who  is  always 
299 


A    LIVING    WAGE 

under  the  despotism  of  physical  want."  ^  And  the 
more  numerous  and  complicated  social  relations  be- 
come, the  greater  will  be  the  necessity  for  regulation, 
and  the  larger  will  be  the  practical  freedom  that 
will  result  from  wise  regulation.  The  second  class 
of  restrictions  applies  theoretically  to  all  the  citizens, 
but  practically  impedes  the  liberty  or  activity  of  com- 
paratively few,  because  it  has  to  do  with  actions  that 
are  beyond  the  reach  of  the  great  majority.  A  law 
that  forbids  one  hundred  persons  to  do  something 
that  ninety-nine  of  them  could  never  have  done  in 
any  event,  will  not  deprive  the  ninety-nine  of  any 
valuable  freedom.  For  instance,  a  statute  compel- 
ling all  employers  of  railway  labor  to  pay  a  certam 
minimum  of  wages,  or  to  carry  goods  and  passengers 
at  certain  maximum  rates,  would  limit  the  freedom 
of  all  persons  who  owned  or  operated  railroads ;  but 
since  those  who  are  or  can  hope  to  become  employ- 
ers form  but  a  small  proportion  of  the  whole  number 
of  persons  engaged  in  and  afifected  by  this  industry, 
the  liberty  of  the  great  majority  would  not  be  cur- 
tailed in  any  vital  way.  On  the  contrary,  the  latter 
section  of  the  community  would  secure  a  wider 
measure  of  freedom  in  larger  economic  opportuni- 
ties. Now,  it  is  to  this  class  of  regulations  that  all 
the  more  moderate  proposals  for  increased  State  in- 
tervention belong.  They  would  enlarge  the  con- 
crete freedom  of  the  majority,  and  diminish  that  of 
the  minority.  They  would  afifect  not  so  much  the  legal 
independence  of  the  individual  as  the  distribution  of 

^"The  State  in  Relation  to  Labor,"  p.  15.  Cf.  the  keen 
criticism  of  the  "police  theory  of  the  State"  in  Huxley's  essay 
on  "Administrative  Nihilism." 

300 


OBLIGATION     OF    THE    STATE 

economic  opportunities  among  different  groups  of 
individuals. 

As  an  abstract  proposition,  the  State  has  both  the 
right  and  the  duty  to  compel  all  employers  to  pay  a 
Living  Wage.  ^  The  function  of  the  State  is  to  pro- 
mote the  social  welfare.  The  social  welfare  means 
in  practice  the  welfare  of  all  individuals  over  whom 
the  State  has  authority ;  and  the  welfare  of  the  in- 
dividual includes  all  those  conditions  that  assist  in 
the  pursuit  of  his  earthly  end,  namely,  the  reasonable 
development  of  his  personality.  The  primary  busi- 
ness of  the  State,  then,  is  to  protect  men  in  the  en- 
joyment of  those  opportunities  that  are  essential  to 
right  and  reasonable  life.  They  may  be  summed  up 
in  the  phrase,  natural  rights.  In  addition  to  this, 
the  State  is  charged  with  the  obligation  of  promot- 
ing social  prosperity.  That  is  to  say,  its  task  is  not 
merely  to  provide  men  with  the  opportunities  that  are 
absolutely  essential  to  right  living,  but  also  to  fur- 
nish as  far  as  practicable  the  conditions  of  wider  and 
fuller  life.  Since  man's  capacity  for  progress  is 
indefinite,  the  State  will  fail  in  its  mission  of  further- 
ing social  welfare  unless  it  does  something  toward 
securing  to  him  the  external  conditions  of  something 
more  than  the  minimum  of  reasonable  personal  de- 
velopment. State  activity  in  the  first  sense  is  main- 
ly protective  and  restrictive ;  in  the  second,  auxiliary 
and  co-operative.  -     Now,  a  law  requiring  employ- 

^  Cf.  Vermeersch,  "Quaestiones  de  Justitia,"  pp.  581,  582; 
Lehmkuhl,  "Theologia  Moralis,"  I,  p.  715,  gth  ed. ;  Pottier, 
"De  Jure  et  de  Justitia,"  pp.  262,  263  ;  Pope  Leo  XIH,  Encyc- 
lical on  the  Condition  of  Labor. 

'  For  discussions  of  the  functions  of  the  State,  see  :  Bou- 
quillon,  "Theologia  Moralis   Fundamentalis,"  pp.  445-450,   3d 

301 


A    LIVING    WAGE 

ers  to  pay  a  Living  Wage  would  evidently  be  an  in- 
stance of  State  activity  in  the  primary  sense,  for  it 
would  be  an  attempt  to  protect  natural  rights,  and 
to  provide  one  of  the  essential  conditions  of  reason- 
able human  life.  Even  those  who  hold  that  the  sole 
function  of  the  State  is  to  safeguard  individuals 
against  violence  and  injustice,  in  other  words,  to 
protect  life  and  property,  could  logically  admit  that 
the  enactment  of  such  a  law  would  not  be  an  undue 
exercise  of  power.  To  compel  a  man  to  work  for 
less  than  a  Living  Wage  is  as  truly  an  act  of  injus- 
tice as  to  pick  his  pocket.  In  a  wide  sense  it  is  also 
an  attack  upon  his  life.  An  ordinance  prohibiting 
this  species  of  oppression  would,  therefore,  be  a 
measure  for  the  protection  of  life  and  property. 

The  question  of  the  legal  enforcement  of  a  Living 
Wage  is,  consequently,  one  of  expediency.  It  has 
two  distinct  phases.  We  may  ask  whether  a  uni- 
versal Living  Wage  is  economically  feasible;  and, 
supposing  it  to  be  workable,  whether  legal  enactment 
could  bring  it  about.  The  former  inquiry  does  not 
concern  itself  with  the  productive  resources  of  the 
country,  since,  as  we  have  already  seen,  these  are 
ample  to  supply  all  the  inhabitants  with  the  requisites 
of  a  decent  livelihood,  but  with  the  consequences 
that  might  be  expected  to  follow  the  establishment 
of  a  universal  Living  Wage  in  our  present  industrial 
system.  The  difficulties  that  it  suggests  remain 
substantially  the  same  whether  this  condition  be  at- 
tained through  Trade  Union  action,  the  payment  of 

ed. ;  Willoughby,  "The  Nature  of  the  State,"  passim ;  and  Lilly, 
"First  Principles  in  Politics,"  passim. 
302 


OBLIGATION    OF    THE    STATE 

sufficiently  high  prices  by  consumers,  or  legal  enact- 
ment. 

This  question  is  frequently  answered  in  the  nega- 
tive, on  the  ground  that  if  all  the  laborers  who  are 
at  present  underpaid  were  to  receive  a  Living  Wage, 
there  would  be  such  a  rise  in  the  price  of  the  goods 
and  services  that  they  produce  as  to  cause  a  cor- 
responding decline  in  demand.  Instead  of  insuffi- 
cient wages,  we  should  have  the  evil  of  insufficient 
employment.  President  Hadley  says  that  society, 
that  is,  the  consuming  public,  regards  the  making 
of  a  certain  amount  of  product  as  worth  only  so 
much,  and  if  compelled  to  pay  more  will  diminish 
the  quantity  that  it  consumes.  ^  Professor  Smart 
maintains  that  the  decreased  demand  would  result 
in  the  laborers  being  put  on  short  time,  so  that  their 
Living  Wage  would  prove  a  misnomer.  ^  President 
Hadley's  contention  is  true  in  a  general  way,  but  it 
is  subject  to  two  important  qualifications.  It  im- 
plies, or  at  least  will  seem  to  many  to  imply,  that  the 
consumers  look  upon  the  low  prices  at  which  certain 
products  sell  as  a  full  and  precise  equivalent  of  the 
fixed  and  necessary  "worth"  of  these  articles;  and 
it  easily  leads  to  an  exaggerated  idea  of  the  part 
taken  by  consumers  in  creating  these  prices.  Why 
do  consumers  regard  certain  products  of  underpaid 
labor  as  worth  no  more  than  they  now  sell  for  ?  Be- 
cause the  low  wages  resulting  from  excessive  com- 
petition among  both  employers  and  workers  have 
enabled  these    prices    to    become  customary.     As 

*  "Economics,"    sec.    406. 

*  "Studies  in  Economics,"  pp.  50-60. 

303 


A    LIVING    WAGE 

Professor  Smart  points  out,  the  proposition  that 
women's  wages  are  low  because  the  goods  that  they 
turn  out  are  cheap,  puts — so  far  as  the  question  of 
primary  causality  is  concerned — "the  cart  before  the 
horse."  The  initiative  in  reducing  prices  comes 
from  the  producers  not  from  the  public.  Once 
prices  are  down,  however,  the  public  accepts  them 
so  eagerly  that  to  raise  them  and  the  low  wages 
underlying  them,  constitutes  a  very  difficult  prob- 
lem. ^  This  is  the  explanation  of  low  prices  and  the 
real  significance  of  the  consumer's  estimate  of  the 
"worth"  of  low  priced  goods.  President  Hadley 
would,  indeed,  be  one  of  the  first  to  subscribe  to  this 
view,  but  his  language  in  the  section  referred  to 
above  can  be  construed  in  support  of  an  exaggerated 
notion  of  the  rigidity  and  significance  of  the  evalua- 
tions made  by  the  consumer.  That  society  regards 
the  prices  that  it  pays  for  cheap  goods  as  an  "equiva- 
lent" of  the  labor  expended  in  producing  them,  is 
true  in  the  sense  that  it  will  not  voluntarily  offer  to 
pay  more ;  it  is  not  necessarily  true  in  the  sense  that 
society  would  not  pay  more  for  these  goods  rather 
than  do  without  them.  And  this  brings  us  to  the 
second  qualification  to  be  made  concerning  President 
Hadley's  statement,  and  likewise  with  regard  to  that 
of  Professor  Smart.  A  rise  in  the  price  of  an  arti- 
cle will  always  be  followed  by  a  falling  off  in  the 
demand  for  it,  other  conditions  remaining  unchanged. 
If,  however,  it  is  accompanied  by  a  corresponding 
increase  in  the  purchasing  power  of  consumers, 
actual  and  potential,  there  need  be  no  diminution  in 
*  "Studies  in  Economics,"  pp.  1 19-122. 
304 


OBLIGATION    OF    THE    STATE 

the  amount  sold.  The  prices  of  most  of  the  neces- 
sities of  life  have  risen  greatly  in  the  last  seven  years, 
yet  the  effective  demand  for  them  has  not  decreased. 
The  contrary  has,  in  fact,  occurred,  thus  exemplify- 
ing the  general  rule  that  high  prices  mean  greater 
industrial  activity  and  a  smaller  volume  of  unemploy- 
ment. Whether  the  establishment  of  a  Living  Wage 
in  all  the  industries  in  which  it  does  not  now  exist 
would  bring  with  it  sufficient  demand  to  continue  or 
increase  the  number  at  present  employed,  cannot  be 
mathematically  determined  beforehand.  This  much, 
however,  may  be  confidently  affirmed :  of  the  actual 
and  potential  consumers  affected,  the  richest  section 
would  probably  buy  as  much  as  they  did  before 
prices  rose ;  another  section  would  certainly  re- 
duce its  consumption ;  some  of  the  laborers  former- 
ly underpaid  would  increase  their  consumption ;  and 
some  of  them  would  become  consumers  of  these 
particular  goods  for  the  first  time.  Hence  the 
effect  of  a  rise  in  prices  consequent  upon  the  uni- 
versal application  of  the  Living  Wage  principle 
would  be  less  simple  as  well  as  less  serious  than  the 
statements  of  the  above-mentioned  writers  seem  to 
imply. 

A  second  objection  is  drawn  from  the  assumption 
that  even  though  the  higher  range  of  prices  should 
cause  no  decrease  in  demand  or  in  employment,  it 
would  swallow  up  completely  the  rise  in  remunera- 
tion. What  the  laborer  gained  in  wages  he  would 
lose  in  the  higher  cost  of  living.  To  put  it  technical- 
ly, there  would  be  a  rise  in  nominal  but  not  in  real 
wages.     Sidney  and  Beatrice  Webb  have  carefully 

20  30s 


A    LIVING    WAGE 

examined  this  contention  and  given  a  thoroughly 
satisfactory  reply :  "Mr.  Herbert  Spencer,  in  the  con- 
cluding volume  of  his  Synthetic  Philosophy,  naively 
makes  this  his  one  economic  objection  to  Trade 
Unionism.  'If,'  he  says,  'wages  are  forced  up,  the 
price  of  the  article  produced  must  presently  be 
forced  up.  What  then  happens  if,  as  now.  Trade 
Unions  are  established  among  the  workers  in  nearly 
all  occupations,  and  if  these  Unions  severally  succeed 
in  making  wages  higher  ?  All  the  various  articles  they 
are  occupied  in  making  must  be  raised  in  price ;  and 
each  Trade  Unionist,  while  so  much  the  more  in 
pocket  by  advanced  wages,  is  so  much  the  more  out 
of  pocket  by  having  to  buy  them  at  advanced  rates.''- 
But  this  is  to  assume  that  the  wage  earners  purchase 
as  consumers  the  whole  of  the  commodities  and  serv- 
ices which  they  produce.  We  need  not  remind  the 
reader  that  this  is  untrue.  In  the  United  Kingdom, 
for  instance,  though  the  wage  earners  number  four- 
fifths  of  the  population,  they  consume — to  take  the 
highest  estimate — only  between  one-third  and  two- 
fifths  of  the  annual  aggregate  of  products  and 
services,  the  remainder  being  enjoyed  by  the  prop- 
ertied classes  and  brain  workers.  Even  if  a  gen- 
eral rise  in  wages,  amounting  to,  say,  fifty  million 
sterling,  produced  a  general  rise  in  prices  to  the  ex- 
tent of  fifty  million  sterling,  spread  equally  over  all 
products,  it  could  not  be  said  that  the  wage  earners 
as  a  class  would  have  to  bear  on  their  own  purchas- 
es more  than  one-third  to  two-fifths  of  the  addition- 
al price.     If  the  rise  in  price  was  not  spread  equally 

*  "Industrial  Institutions,"  London,  1896,  p.  536. 
306 


OBLIGATION    OF    THE    STATE 

over  all  commodities  and  services,  but  occurred  only 
in  those  consumed  by  the  other  classes,  the  rise  in 
wages  would  have  been  a  net  gain  to  the  wage 
earners.  Only  in  the  impossible  case  of  the  rise 
occurring  exclusively  in  the  commodities  consumed 
by  the  wage-earning  classes — these  commodities 
being  as  we  have  seen,  only  one-third  to  two-fifths 
of  the  whole — would  that  class  find  its  action  in 
raising  wages  nullified  in  the  simple  manner  that 
Mr.  Spencer  imagines?  Hence,  it  is,  that  even  if  a 
rise  in  the  Standard  of  Life  of  the  whole  wage-earn- 
ing class  produces  an  equivalent  general  rise  in  the 
price  of  commodities,  the  result  must  nevertheless 
be  a  net  gain  to  the  wage  earners."  ^  With  some 
difference  of  degree,  this  analysis  describes  the 
bearing  of  any  rise  in  the  price  of  their  products  up- 
on that  section  of  the  American  working  class  that 
is  at  present  underpaid.  They  are  not  the  sole  con- 
sumers of  their  products ;  hence  a  part  of  the  rise 
must  be  borne  by  others.  Nor  would  these  other 
consumers, — laborers,  salary-receivers,  professional 
classes,  farmers,  landowners,  employers  and  capital- 
ists,— be  able  to  recoup  by  raising  the  price  of  their 
products  and  services  to  such  an  extent  that  the  net 
gains  of  the  heretofore  underpaid  workers  would 
all  be  absorbed  in  the  additional  price  that  they  would 
have  to  pay  for  the  same  amount  of  these  products 
and  services  as  they  formerly  consumed.  The 
workers  whose  remuneration  was  raised  to  the  Liv- 
ing Wage  level  would  not  be  in  the  same  condition 
of  economic  advantage,  or  disadvantage  relatively  to 
^"Industrial  Democracy,"  1st  ed.,  pp.  781,  782,  note. 
307 


A    LIVING    WAGE 

other  economic  classes  as  they  were  before  the  rise. 
There  is  no  more  reason  for  expecting  this  outcome 
than  there  was  for  the  prediction,  formerly  made, 
that  all  the  gains  effected  by  Trade  Union  action 
would  be  neutralized  by  the  higher  prices  that  the 
Unionists  would  be  obliged  to  pay  as  consumers.  As 
a  matter  of  fact,  group  after  group  have  through 
organization  obtained  increases  in  wages,  without 
suffering  anything  like  an  equivalent  loss  in  the 
purchasing  power  of  their  individual  dollars.  Ex- 
perience has  shown  that  whenever  one  economic 
class  has  gained  in  money  income  at  the  apparent 
expense  of  other  classes,  a  part  of  the  gain  has  been 
not  merely  nominal,  and  a  part  of  it  has  been  not 
only  in  appearance  but  in  fact  at  the  expense  of  the 
other  classes. 

Thus  far  the  discussion  of  both  of  the  objections 
that  we  have  been  considering,  has  proceeded  on  the 
assumption  that  the  rise  in  prices  would  be  fully 
equivalent  to  the  rise  in  wages.  The  assumption 
concedes  too  much.  Part  of  the  increased  labor 
cost  would  come  out  of  interest ;  part  out  of  profits ; 
part  out  of  the  saving  effected  through  the  elimina- 
tion of  incompetent  employers ;  and  part  out  of  the 
increased  efficiency  of  both  labor  and  capital.  Some 
of  the  employers  who  found  it  impossible  to  pay  a 
Living  Wage  and  at  the  same  time  obtain  the  usual 
rate  of  interest  on  their  own  capital  invested  in  the 
business,  would  content  themselves  with  a  some- 
what lower  rate.  They  would  do  this  rather  than 
go  out  of  business.  Some  of  those  who  were  un- 
able to  pay  the  old  rate  on  borrowed  capital  would 

308 


OBLIGATION    OF    THE    STATE 

offer  a  lower  rate,  thereby  lessening  the  demand  for 
capital  and  exerting  a  downward  pressure  on  the 
rate  of  interest.  And  this  downward  pressure  would 
be  reinforced  by  the  action  of  those  capitalist-em- 
ployers who  withdrew  from  business  and  threw 
their  capital  on  the  market  rather  than  accept  a 
smaller  return  from  their  investment.  Moreover, 
since  competition  is  never  perfect,  and  since  some 
business  men  do  get  money  more  cheaply  than  oth- 
ers in  similar  circumstances,  some  of  the  borrowers 
whom  we  are  considering  would  succeed  in  renew- 
ing their  loans  at  a  lower  rate  than  that  which  gen- 
erally prevailed.  Some  lenders  would  submit  to 
this  condition  in  preference  to  the  risk  of  faring 
worse  elsewhere.  Finally,  there  are  some  employ- 
ers who  would  be  able  and  willing  to  take  a  part  of 
the  added  labor  cost  out  of  their  personal  profits. 
That  is,  they  would  be  willing  to  do  so  rather  than 
cease  to  be  employers  or  attempt  to  saddle  all  the  in- 
creased expense  on  the  selling  price  of  the  product. 
To  deny  these  general  statements  concerning  the 
capitalist-employer,  the  loan-capitalist,  and  the  em- 
ployer in  his  capacity  of  profit  receiver,  is  to  contend 
that  all  the  individuals  of  these  three  classes  would 
absolutely  refuse  to  accept  a  lower  return  for  their 
money  or  their  activity  than  they  now  obtain.  It 
is  to  maintain  that  of  all  the  agents  of  production 
only  the  laborer  will  ever  submit  to  a  reduction  in 
his  share  of  the  product.  Needless  to  say,  this 
theory  is  contradicted  by  experience.  Both  interest 
and  profits  have  fallen,  and  there  is  no  good  reason 
to  think  that  they  have  already  reached  an  irredu- 
309 


A    LIVING    WAGE 

cible  minimum.  On  the  contrary,  it  is  practically 
certain  that  the  general  rate  of  interest  must,  inde- 
pendently of  the  Living  Wage  question,  suffer  a 
further  decline.  Perhaps  a  majority  of  the  small 
employers  would  not,  or  could  not,  continue  their 
present  functions  if  their  personal  returns  were 
diminished;  but  this  is  by  no  means  the  case  with 
all.  The  situation  in  which  employers  who  were 
compelled  to  raise  the  compensation  of  their  under- 
paid employees  to  the  plane  of  a  Living  Wage  would 
find  themselves,  is  this :  the  sources  from  which  the 
additional  wage-payments  can  be  drawn  are  only 
three,  namely,  the  selling  price  of  the  product,  in- 
terest, and  profits.  Now  the  difficulty  of  raising 
prices  to  a  level  sufficiently  high — and  of  maintaining 
them  there — to  provide  for  all  the  increased  labor 
cost,  is  so  great  that  many  employers  will  find  it 
easier  and  more  satisfactory  to  secure  a  portion  of 
the  necessary  funds  from  one  or  both  of  the  other 
two  sources.  In  the  third  place,  some  of  the  more 
competent  or  better  situated  employers  at  present 
pay  substantially  a  Living  Wage  in  circumstances 
and  industries  in  which  their  competitors  generally 
fail  to  do  so,  and  could  under  other  conditions  take 
care  of  a  large  proportion  of  the  business  now  car- 
ried on  by  the  latter.  When  the  Living  Wage  be- 
came universal  they  would  not  find  it  necessary  to 
raise  prices  to  any  appreciable  extent,  while  many  of 
their  less  competent  competitors  would  be  forced  to 
the  wall.  This  "survival  of  the  fittest"  might  pro- 
ceed so  far  that  prices  would  ultimately  reach  the 
old  level,  owing  to  the  satisfactory  profits  obtained 
310 


OBLIGATION    OF    THE    STATE 

by  the  "survivors"  through  the  increased  volume  of 
sales.  At  any  rate,  it  is  certain  that  a  large  number 
of  incompetent  employers  are  now  able  to  continue 
their  functions,  not  because  their  services  are  needed 
by  the  community,  but  because  they  pay  a  smaller 
wage  than  their  competitors  ;  and  that  the  elimination 
of  these  from  any  cause  whatever  would  reduce  the 
total  cost  of  production,  and  enable  their  labor 
force  to  find  employment  at  better  wages  with  the 
more  competent  employers.  In  the  fourth  place,  a 
part  of  the  increase  in  wages  would  be  derived  from 
the  increased  productivity  of  the  industries  in  which 
the  rise  occurred.  The  higher  wage  enjoyed  by  the 
laborers  would  give  them  a  higher  physical  and 
mental  efificiency,  and  consequently  a  greater  pro- 
ductive power,  while  the  increased  labor  cost  of  pro- 
duction would  compel  business  men  to  introduce 
better  machinery  and  a  better  organization  of  in- 
dustry. ^  Most  of  the  improvements  of  the  last 
century  in  methods  of  production  seem  to  have 
originated  in  the  pressure  exerted  upon  employers 
and  by  the  demands  of  labor.  ^  As  long  as  they 
could  secure  the  advantages  of  cheap  production 
through  cheap  labor,  employers  generally  declined 
to  undertake  the  exertion,  risk,  and  expense  of  dis- 
covering or  introducing  new  processes.  A  similar 
condition  obtains  to-day  in  many  of  the  industries 
in  which  labor  is  underpaid,  and  a  similar  course 
would  be  adopted  by  many  employers  if  they  found 
it  no  longer  possible  to  hire  workers  for  less  than  a 
Living  Wage. 

^  Cf.  Gunton's  "Wealth  and  Progress,"  passim. 
'  Cf.  Webb,  "Industrial  Democracy,"  pp.  72^727,  ist  ed. 
311 


A    LIVING    WAGE 

In  general,  it  may  be  said  that  the  arguments 
against  the  economic  feasibility  of  a  universal  Liv- 
ing Wage  are  reducible  to  two.  The  first  is  that  the 
national  product  of  food  and  other  articles  of  neces- 
sity and  comfort  would  not  be  adequate ;  the  second, 
that  the  machinery  of  distribution  could  not  be  so 
modified  as  to  achieve  the  desired  result.  It  is  dif- 
ficult to  see  how  any  American  economist  can  take 
the  former  contention  seriously.  As  pointed  out  in 
an  earlier  chapter,  our  natural  resources  and  pro- 
ductive capacity  are  more  than  sufficient  to  furnish 
the  entire  population  with  the  requisites  of  a  decent 
livelihood.  And  the  preceding  pages  of  this  chapter 
have  shown  that  the  objections  based  on  the  difficulty 
of  obtaining  the  required  modification  of  the  dis- 
tributive process  are  far  from  being  conclusive. 
They  can  all  be,  and  have  been,  urged  against  every 
effort  that  has  ever  been  made,  by  Trade  Union  ac- 
tion or  otherwise,  to  better  the  condition  of  any  group 
of  workers  ;  for  they  all  turn  on  the  supposed  evil  con- 
sequences of  a  higher  cost  of  production  and  higher 
prices  to  the  consumer.  If  there  is  any  difference 
between  the  economic  and  social  effects  of  the  gains 
that  labor  has  already  struggled  for  and  secured, 
and  those  that  would  result  from  the  universal  appli- 
cation of  the  Living  Wage  principle,  it  is  a  difference 
only  of  degree.  Yet  experience  has  shown  that 
gains  in  wages  invariably  mean  a  real  improvement 
in  the  condition  of  those  obtaining  them,  and  rarely 
involve  any  hardship  worth  considering  to  other 
classes  or  to  the  community  at  large.  The  discus- 
sion of  this  point  may  be  fitly  closed  with  a  citation 
312 


OBLIGATION    OF    THE    STATE 

from  two  investigators  of  the  very  highest  authority. 
"We  desire  to  emphasize  the  point  that,  whatever 
poHtical  objections  there  may  be  to  the  fixing  by 
law  of  a  National  Minimum  Wage,  and  whatever 
practical  difficulties  there  may  be  in  the  way  of  car- 
rying it  out,  the  proposal,  from  the  point  of  viezv  of 
abstract  economics,  is  open  to  no  more  objection 
than  the  fixing  by  law  of  a  National  Minimum  of 
Sanitation,  or  a  National  Minimum  of  Leisure,  both 
of  which  are,  in  principle,  embodied  in  our  factory 
legislation.  Indeed,  a  minimum  wage,  since  it 
would  in  no  way  interfere  with  the  fullest  use  of 
machinery  and  plant,  or  otherwise  check  productive 
ity,  would  seem  to  be  even  less  open  to  economic 
criticism  than  a  limitation  of  the  hours  of  labor."  ^ 

The  obstacles  to  the  legal  enactment  and  enforce- 
ment of  a  Living  Wage  in  America  are  great,  but 
not  necessarily  insuperable.  There  is,  in  the  first 
place,  that  perverse  individualism  which  prefers 
irrational  liberty  and  industrial  anarchy  to  a  legal 
regime  of  order  and  justice.  This  spirit  is  still 
sufficiently  potent  to  render  exceedingly  difficult 
those  changes  in  the  Federal  constitution  and  in  the 
constitutions  of  the  several  states  which  would  be 
a  preliminary  requisite  to  any  such  legislation. 
After  the  law  had  been  enacted,  the  willingness  of 
the  unemployed,  always  numerous  in  the  class  affect- 
ed by  the  new  statute,  to  sell  their  labor  below  the 

^  Sidney  and  Beatrice  Webb  in  "Industrial  Democracy,"  p. 
777,  note,  ist  ed.  Dr.  Cunningham  maintains  that  the  verdict 
of  political  economy  is  in  favor  of  rather  than  against  the 
principle  of  a  Living  Wage.  See  his  article  in  the  "Con- 
temporary Review,"  vol.  Ixv,  p.  i6. 


A    LIVING    WAGE 

legal  rate  through  fear  of  not  obtaining  employment 
otherwise,  would  constitute  a  serious  menace  to  its 
successful  enforcement.  In  the  case  of  illegal  agree- 
ments entered  into  from  this  motive,  both  of  the 
contracting  parties  would  be  interested  in  violating 
the  law.  Nevertheless  there  are  good  grounds  for 
believing  that  an  honest  and  sustained  attempt  lo 
secure  a  Living  Wage  by  legal  enactment  would  meet 
with  a  fair  measure  of  success.  Public  opinion  is 
changing  very  rapidly  in  its  attitude  toward  govern- 
ment regulation  of  industry,  and  especially  with  re- 
gard to  the  question  of  legislative  repression  of 
abuses.  It  is  coming  to  see  that  unregulated  com- 
petition has  proved  itself  inadequate  to  protect  the 
consumer  against  monopoly  and  extortionate  prices, 
and  the  producer  against  exploitation  and  starva- 
tion wages.  Very  probably  a  large  majority  of  the 
voters  of  the  country  agree  with  President  Roose- 
velt that,  if  the  Federal  Government  does  not  now 
possess  the  power  to  regulate  corporations  adequate- 
ly, the  National  Constitution  ought  to  be  changed 
accordingly.  Once  an  amendment  of  this  character 
has  been  effected,  constitutional  modifications  em- 
powering congress  and  the  state  legislatures  to  pass 
a  minimum  wage  law,  could  readily  be  obtained. 
Thus  the  greatest  of  the  obstacles  to  a  Universal 
Living  Wage  by  legal  enactment  would  have  disap- 
peared. After  the  law  had  been  placed  on  the 
statute  books,  organized  labor  and  a  large  section  of 
the  underpaid  workers  who  were  not  organized 
would  be  vitally  and  actively  interested  in  its  en- 
forcement. The  penalties  attached  to  its  violation 
314 


OBLIGATION    OF    THE    STATE 

could  be  made  sufficiently  heavy  to  deter  all  but  the 
boldest  employers  and  the  most  reckless  working- 
men.  Even  if  it  were  observed  in  the  case  of,  say, 
only  one-fifth  of  the  workers  previously  underpaid, 
there  would  be  so  much  gained,  and  according  as 
the  public  came  to  realize  the  reasonableness  and 
necessity  of  the  new  legislation,  the  proportion  of 
instances  in  which  it  was  violated  would  rapidly  de- 
crease. Owing  to  differences  in  the  cost  of  living 
and  other  conditions,  the  greater  part  of  such  legisla- 
tion would  have  to  come  from  the  several  states 
rather  than  from  the  National  congress.  Its  terms 
in  detail  and  its  enforcement  could  best  be  deter- 
mined and  secured  through  a  commission,  empow- 
ered to  adjust  it  to  different  industries  and  different 
centres  of  population.  Precisely  the  same  principle 
is  embodied  in  the  legislation  which  at  present  au- 
thorizes state  railway  commissions  to  fix  reasonable 
rates  for  the  transportation  of  passengers  and 
freight.  Their  power  to  lay  down  maximum  rates 
on  the  basis  of  a  reasonable  return  from  investments 
is  at  bottom  the  power  to  limit,  indirectly,  of  course, 
the  incomes  of  the  stockholders.  The  wage-commis- 
sions would  attack  the  opposite  extreme  of  industrial 
injustice  by  fixing  a  minimum  rate  of  remuneration 
for  the  workingmen. 

The  principle  of  a  Living  Wage  by  legal  enactment 
is  already  being  tested  in  the  Minimum  Wage  Board 
law  of  Victoria,  Australia,  and  in  the  provision  of 
the  Conciliation  and  Arbitration  act  of  New  Zealand 
which  empowers  the  court  of  arbitration  to  prescribe 
a  minimum  wage  in  any  industry  in  which  it  makes 

315 


A    LIVING    WAGE 

an  award.  ^  In  the  former  region  it  has  been  found 
that  when  a  fair  average  wage  is  fixed  as  the  mini- 
mum, competition  among  employers  to  get  the  best 
possible  hands  for  the  money  throws  the  less  com- 
petent out  of  employment.  Through  fear  of  not 
obtaining  work  otherwise,  many  of  the  workers 
whose  efficiency  is  fully  up  to  the  average  represent 
themselves  as  disqualified  by  "age  or  infirmity"  from 
earning  the  minimum  wage,  and  secure  a  legal  per- 
mit to  sell  their  labor  for  less ;  while  others  contract 
for  the  legal  rate,  but  return  a  part  of  their  wages  to 
the  employer.  Similar  evasions  of  the  law  have 
been  practised  in  New  Zealand,  though,  it  seems,  in 
a  smaller  proportion  of  cases.  Now  it  is  obvious 
that  any  law  requiring  the  payment  of  a  minimum 
rate  of  wages  must  include  some  provision  whereby 
workers  of  less  than  normal  efficiency  can  obtain 
legal  authorization  to  accept  a  smaller  remunera- 
tion. Whenever  the  supply  of  labor  is  in  excess  of 
the  demand  at  the  legal  rate,  some  of  the  able-bodied 
workers  will,  consequently,  attempt  to  take  ad- 
vantage of  the  provision  by  unlawful  practices.  Il- 
legal and  secret  agreements  to  give  back  a  portion  of 
the  wages  to  the  employer  will  likewise  be  inevitable. 
Yet  the  number  of  evasions  of  the  law  from  these 
two  causes  will — if  any  reasonable  endeavor  is  made 
to  enforce  it — ^be  much  smaller  than  the  number  of 
cases  in  which  less  than  the  minimum  rate  would  be 
paid  if  the  law  did  not  exist.  To  put  it  the  other 
way,  the  proportion  of  workers  obtaining  the  rate 

^  See  the  articles  by  Dr.  Victor  S.  Clark  in  the  Bulletins  of 
the  Bureau  of  Labor:  No.  56,  pp.  60-78;  and  No.  49,  pp. 
1203-1208. 

316 


OBLIGATION    OF   THE    STATE 

fixed  as  the  legal  minimum  will  be  much  larger  with 
the  law  than  without  it ;  for  in  the  latter  case  there 
would  be  nothing  to  hinder  employers  from  hiring 
the  whole  body  of  efficient  laborers  at  a  lower  rate 
but  purely  economic  forces,  while  in  the  former  case 
there  would  be  the  additional  obstacle  set  up  by  the 
legal  prohibition.     And  the  objection  that  some  men 
will  always  evade  the  law  by  handing  back  a  part  of 
their  pay  to  the  employer  in  the  form  of  rebate,  ap- 
pHes  with  equal  force  to  the  Union  scale,  which  is 
really  a  minimum  below  which  the  Unionist  is  for- 
bidden to  go;  but  no  well-informed  person  rejects 
on  this  account  the  principle  of  Unionism,  or  denies 
that   it   has   benefited   the   laborer.     The   practical 
question  is  not  whether  a  minimum  wage  law  would 
be  violated — all    legal   enactments   are   violated   in 
some  degree, — but  whether  it  would  not  raise  to  the 
level  of  decent  living  many  who  would  otherwise  be 
forced  to  remain  in  a  condition  of  economic  wretch- 
edness.    As  a  matter  of  fact,  the  net  results  of  the 
law  in  both  Victoria  and  New  Zealand  seem  to  be  an 
ample  justification  of  its  wisdom.     "A  fair  examina- 
tion of  the  Victorian  minimum  wage  law,"  says  Dr. 
Victor  S.  Clark,  ''must  include  the  statistical  evi- 
dence as  to  its  general  effect  upon  wages  and  em- 
ployment and  the  testimony  as  to  its  influence  on 
the  general  condition  of  the  worker.     If  nobody  had 
been  benefited  by  the  law,  it  would  hardly  have  sur- 
vived nine  years  of  amendment  and  legislative  at- 
tack  There  has  been  a  general  increase  in  the 

pay  of  male  labor  equivalent  to  nineteen  per  cent., 

and  of  female  labor  to  seventeen  per  cent.,  or  about 

317 


A    LIVING    WAGE 

5s.  9d.,  and  2S.  3d.  ($1.40  and  $0.55)  per  week, 
respectively,  in  occupations  under  the  determinations 
of  the  boards."  ^  Speaking  of  the  arbitration  law 
of  New  Zealand,  an  important  feature  of  which  is 
the  provision  fixing  a  minimum  wage,  the  same 
writer  says :  "With  all  its  apparent  defects  the  act  is 
a  success  beyond  the  expectation  of  many  of  its 
early  supporters."  ^ 

Until  such  time  as  a  general  Living  Wage  law  be- 
comes a  reality,  the  State  could  apply  the  principle 
partially.  The  various  legislative  authorities,  na- 
tional, state,  and  municipal,  should  enact  legislation 
providing  that  all  adult  employees  in  the  public  serv- 
ices, or  employed  by  private  firms  on  work  done  by 
contract  for  the  public,  receive  a  wage  adequate  to 
the  decent  maintenance  of  themselves  and  their  fami- 
lies. While  the  number  of  laborers  affected  by  the 
law  would  be  comparatively  small,  the  moral  effect 
on  public  opinion  and  on  purely  private  wage  con- 
tracts would  be  very  considerable.  Similar  legisla- 
tion could  without  difficulty  be  enacted  and  success- 
fully applied  to  all  quasi-public  industries  of  a 
monopolistic  character,  such  as,  railroads,  street  rail- 
ways, and  telegraph,  telephone  and  express  com- 
panies. Professor  T.  S.  Adams  maintains  that  a 
compulsory  arbitration  law — which  would  necessar- 
ily include  the  power  to  determine  rates  of  wages — 
covering  these  industries  is  immediately  feasible. ' 
When  it  is  recalled  that  in  the  highly  prosperous 
year  of  1903  more  than  three-fourths  of  a  million 

^Bulletin  No.  56  of  the  Bureau  of  Labor,  pp.  70,  71. 
"  Bulletin  No.  49  of  the  Bureau  of  Labor,  p.  1255. 
*  "Labor   Problems,"   pp.   325-331- 

318 


OBLIGATION    OF    THE    STATE 

adult  males  in  steam  railway  occupations  received 
less  than  a  Living  Wage,  the  direct  benefits  to  be 
derived  from  this  partial  extension  of  the  Living 
Wage  principle  are  readily  perceived. 

Several  indirect  methods  may  be  mentioned 
through  which  the  State  could  extend  the  field  in 
which  a  Living  Wage  would  prevail.  The  first  is 
legislation  limiting  the  working  day  to  eight  hours, 
and  fixing  the  minimum  age  at  which  children  would 
be  permitted  to  become  wage  earners  at  sixteen 
years.  The  immediate  effect  of  these  measures 
would  be  a  diminution  in  product,  and  an  increase 
in  the  demand  for  labor.  An  increase  in  the  price 
of  labor — a  rise  in  wages — would  follow  necessarily.^ 
In  general,  the  objections  offered  to  this  argument  are 
identical  with  those  urged  against  a  universal  Living 
Wage,  namely,  an  increased  cost  of  production  and 
a  rise  in  the  price  of  the  finished  product.  They 
will  not  be  reconsidered  in  detail  here.  President 
Hadley  and  Mr.  John  Rae  argue  that  if  a  universal 
eight  hour  regime  is  followed  by  a  lessening  in  the 
per  capita  production  of  the  laborer,  the  diminished 
product  will  but  increase  the  number  of  those  re- 
ceiving insufficient  sustenance.  ^  Mr.  Rae's  conten- 
tion that  individual  wealth  cannot  be  increased  by 
diminishing  individual  production,  is  in  one  sense  a 
mathematical  truism ;  as  an  abstract  and  general 
statement,  it  is  untrue.  A  smaller  product  may  be 
so  distributed  that  some  individuals  will  receiv^e 
more  than  they  did  when  the  product  was  larger. 

*  Cf.  Gunton,  "Wealth  and  Progress,"  pp.  240-265. 

*  Hadley,  "Economics,"  sees.  450-454 ;  Rae,  "Eight  Hours 
for  Work,"  chs.  V  and  VI. 

319 


A    LIVING    WAGE 

The  curtailment  of  production  and  increase  of  in- 
dividual profits  that  sometimes  follow  the  consolida- 
tion of  competing  establishments  into  a  trust,  affords 
a  familiar  illustration.  It  cannot  be  too  often  re- 
peated that  with  our  present  abundance  of  natural 
and  industrial  resources,  actual  and  potential,  the 
question  of  raising  the  remuneration  of  the  under- 
paid is  only  in  a  very  minor  degree  a  question  of 
production.  It  is  almost  wholly  a  question  of  dis- 
tribution, of  enabling  one  group  of  individuals  to 
secure  a  portion  of  the  national  product  that  is  now 
regularly  obtained  by  other  groups.  "When  ma- 
chinery is  replacing  man  and  doing  the  heavy  work 
of  industry,  it  is  time  to  get  rid  of  the  ancient  pre- 
judice that  man  must  work  ten  hours  a  day  if  he  is 
to  keep  the  world  up  to  the  level  of  the  comfort  that 
it  has  attained.  Possibly,  if  we  clear  our  minds  of 
cant,  we  may  see  that  the  reason  why  we  still  wish 
the  laborer  to  work  ten  hours  a  day  is  the  fear  that 
we,  the  comfortable  classes,  may  not  go  on  receiving 
the  lion's  share  of  the  wealth  which  these  machines, 
iron  and  human,  are  turning  out."  ^ 

Two  other  methods  of  State  action  to  which  at- 
tention will  be  called  are  housing  and  old  age  pen- 
sions. "No  problem,"  says  a  recent  writer,  "presents 
so  many  startling  aspects  as  the  problem  of  the  hous- 
ing of  the  working  people."  The  overcrowded  con- 
dition in  which  so  many  of  them  are  forced  to  exist 
involves  the  "destruction  of  home  life,  weakening 
of  parental  influence,  falling  off  of  religious  faith, 
changed  relation  of  the  sexes,  absence  of  privacy, 

^  Smart,  "Studies  in  Economics,"  p.  328. 
320 


OBLIGATION    OF    THE    STATE 

intrusion  of  strangers  upon  the  family  life,  the  use 
in  common  of  facilities  of  living  where  propriety 
and  decency  demand  the  restriction  to  a  single  fam- 
ily, the  constant  sight  and  sound  of  debasing  influ- 
ences   from    which    escape    is    impossible."  ^     The 
State  could  build  dwellings  and  sell  them  to  the 
worst  off  of  the  underpaid  workers  for  less  than 
cost,  on  condition  that  they  be  paid  for  in  small  in- 
stallments without  interest.     The  direct  gain  in  com- 
fort to  the  beneficiaries  of  this  action  is  obvious ;  the 
indirect  gain  in  the  form  of  self-respect,  self-con- 
fidence,   hopefulness,    and    courage,    ambition    and 
ability  to  contend  for  better  wages  and  a  higher 
economic  position,  would  be  of  even  greater  im- 
portance.    Finally,  the  State  ought  to  give  every 
laborer  who  has  become  permanently  incapacitated 
for  work  through  old  age,  and  whose  wages  have 
not  been  sufficient  to  make  provision  for  his  declin- 
ing years,  an  annual  pension.  The  man  that  has  toiled 
faithfully  during  all  the  vigorous  portion  of  his  life 
has  a  valid  cl^im  against  society  for  this  amount. 
It  is,  in  fact,  a  part  of  the  Living  Wage  that  is  due 
him  for  his  life  work.     A  system  of  old  age  pensions 
would,  moreover,  afford  considerable  relief  to  many 
underpaid  and  moderately-paid  workers  who  are  now 
burdened  with  the  support  of  relatives  that  are  no 
longer  able  to  earn  their  own  living.  Freed  from  this 
charge,  many  of  the  former  would  enjoy  a  Living 
Wage  in  the  full  sense  of  the  phrase,  while  others 
would  approach  it  much  more  closely  than  they  do 

^  "The  Housing  Problem  in  American  Cities,"  by  Lawrence 
Veiller,  "Annals  of  the  American  Academy  of  Political  and 
Social  Science,"  March,  1905. 

31  321 


A    LIVING    WAGE 

at  present.  State  relief  of  the  incapacitated  has  be- 
come an  especially  urgent  problem  in  this  machine 
age,  when  the  laborer's  working  life  comes  to  a 
close  so  much  earlier  than  formerly.  ^ 

These  forms  of  State  assistance  would,  of  course, 
entail  a  heavy  financial  burden  and  increased  taxa- 
tion. One  method  of  providing  the  required  funds 
may  be  briefly  touched  upon  because  of  its  general 
bearing  on  the  problem  of  distribution.  A  progres- 
sive tax  on  incomes  and  inheritances  could  be  so 
framed  as  to  furnish  the  means  of  carrying  out  the 
projects  of  housing  and  old  age  pensions  on  a  very 
large  scale.  The  rate  on  inheritance  would  naturally 
be  higher  than  that  on  incomes.  Speaking  of  the 
former  method  of  taxation,  Andrew  Carnegie  has 
written :  "Of  all  forms  of  taxation,  this  seems  to  be 
the  wisest.  Men  who  continue  hoarding  great  sums 
all  their  lives,  the  proper  use  of  which  for  public  ends 
would  work  good  to  the  community,  should  be  made 
to  feel  that  the  community  in  the  form  of  the  State, 
cannot  be  deprived  of  its  proper  share.  By  taxing 
estates  heavily  at  death  the  State  marks  its  con- 
demnation of  the  selfish  millionaire's  unworthy  life. 

"It  is  desirable  that  nations  should  go  much  furth- 
er in  this  direction.  Indeed,  it  is  difficult  to  set 
bounds  to  the  share  of  a  rich  man's  estate  which 
should  go  at  his  death  to  the  public  through  the 
agency  of  the  State,  and  by  all  means  such  taxes 
should  be  graduated,  beginning  at  nothing  upon 
moderate  sums  to  dependents,  and  increasing  rapidly 

*  Ct.  The  Final  Report  of  the  Industrial  Commission,  p.  733  ; 
and  Hobson's  "Evolution  of  Modern  Capitalism,"  ch.  IX. 

322 


OBLIGATION    OF    THE    STATE 

as  the  amounts  swell,  until  of  the  millionaire's  hoard, 
as  of  Shylock's,  at  least 

'*  *  *  The  other  half 

Comes  to  the  privy  coffer  of  the  State.' "  * 
The  argument  for  a  graduated  tax,  increasing  in 
rate  with  the  size  of  the  estate,  is  as  valid  in  the 
case  of  incomes  as  in  that  of  inheritance.  In  both, 
the  rich  man  is  compelled  to  give  up  to  the  com- 
munity a  larger  percentage  of  his  wealth  than  the 
man  of  moderate  means  because  the  richer  a  man  is, 
the  less  hardship  does  he  suffer  when  his  possessions 
are  diminished  by  a  given  fraction.  If  it  be  objected 
that  to  apply  the  proceeds  of  these  forms  of  taxation 
to  the  purposes  here  advocated,  is  to  take  from  the 
rich  and  give  to  the  poor,  the  charge  may  be  passed 
over  as  correct  in  substance.  It  implies,  however, 
a  false  notion  of  the  morality  of  the  proposal.  The 
State  is  bound  not  only  to  protect  its  citizens  in  the 
enjoyment  of  their  natural  rights  to  the  effective 
opportunity  of  gaining  a  decent  livelihood  by  their 
labor,  but  to  compensate,  as  far  as  practicable,  those 
persons  for  whom  it  has  failed  to  provide  such  op- 
portunity. For  this  purpose  taxes  must  be  levied, 
and  they  should  be  apportioned  in  accordance  with 
the  resources  of  the  citizens.  ^ 

^"The  Gospel  of  Wealth,"  pp.  ii,  12. 

*  Socialism  is  not  considered  among  the  methods  of  State 
activity  for  two  reasons :  first,  because  the  discussion  is  con- 
fined to  the  rights  and  obligations  that  rise  out  of  the  v/age- 
system  of  industry ;  and,  second,  because  the  writer  does  not 
believe  that  Socialism  is  either  practicable  or  desirable. 


323 


CHAPTER  XIX 


Summary  and  Conclusion 

Resume  of  the  main  argument.  Three  important  con- 
clusions: (a)  a  complete  scheme  of  distributive  justice 
is  exceedingly  difficult  to  formulate;  (b)  a  universal  Living 
Wage  would  mean  an  immense  improvement  in  social  and 
industrial  conditions;  and  (c)  the  realization  of  it  is  less 
difficult  than  the  realization  of  any  other  plan  that  would 
yield  equal  results. 

The  main  argument  of  this  volume  may  be  sum- 
marized as  follows:  the  laborer's  right  to  a  Living 
Wage  is  the  specific  form  of  his  generic  right  to  ob- 
tain on  reasonable  conditions  sufficient  of  the  earth's 
products  to  afford  him  a  decent  livelihood.  The 
latter  right  is,  like  all  other  moral  rights,  based  on 
his  intrinsic  worth  as  a  person,  and  on  the  sacredness 
of  those  needs  that  are  essential  to  the  reasonable 
development  of  personality.  Among  the  things  to 
which  these  needs  point  there  is  included  a  certain 
amount  of  material  goods.  A  man's  right  to  this 
indispensable  minimum  of  the  bounty  of  nature  is 
as  valid  as  his  right  to  life :  the  difference  is  merely 
in  degree  of  importance.  Now  when  the  man  whose 
social  and  economic  function  is  that  of  a  wage  earn- 
er has  expended  all  his  working  time  and  energy  in 

324 


SUMMARY    AND    CONCLUSION 

the  performance  of  some  useful  task,  he  has  fulfilled 
the  only  condition  that  in  his  case  can  be  regarded 
as  a  reasonable  prerequisite  to  the  actual  enjoyment 
of  his  right  to  a  decent  livelihood.  The  obligation 
of  providing  him  with  the  material  means  of  living 
decently  rests  in  a  general  way  upon  all  his  fellow 
men.  That  is  to  say,  they  are  all  under  moral  re- 
straint not  to  do  anything  that  would  be  an  unreason- 
able interference  with  his  access  to  these  means. 
However,  it  is  only  those  persons  who  are  in  control 
of  the  goods  and  opportunities  of  living  that  are 
practicably  within  his  reach,  who  can  effectively 
hinder  or  promote  his  enjoyment  of  the  right  in 
question.  When  they  prevent  him  from  peaceably 
getting  possession  of  the  requisite  amount  of  goods, 
they  are  morally  responsible  for  his  failure  to  obtain 
a  decent  livelihood.  Their  action  is  as  unjust  as  that 
of  the  majority  of  the  first  occupants  of  a  No-man's 
Land  who  should  force  the  minority  to  work  for  a 
bare  subsistence.  This  specific  obligation  of  the 
class  of  persons  that  we  are  considering  falls  prima- 
rily upon  the  employer ;  for  his  economic  position  as 
direct  beneficiary  of  the  laborer's  exertion  and  as 
payer  of  wages,  renders  this  the  only  practicable 
outcome  of  any  reasonable  division  of  the  com- 
munity's opportunities  of  living  and  of  the  corre- 
sponding responsibilities.  Nor  can  the  employer 
escape  this  duty  of  paying  a  Living  Wage  by  taking 
refuge  behind  the  terms  of  a  so-called  free  contract. 
The  fact  is  that  the  underpaid  laborer  does  not  tvUl- 
ingly  sell  his  labor  for  less  than  the  equivalent  of  a 
decent  livelihood,  any  more  than  the  wayfarer  will- 

325 


A    LIVING    WAGE 

ingly  gives  up  his  purse  to  the  highwayman.  It  is 
the  superior  economic  force  (which  consists  essen- 
tially in  the  ability  to  wait,  while  the  laborer  must  go 
to  work  to-day  or  starve)  possessed  by  the  employer 
that  enables  him  to  hire  labor  for  less  than  a  Living 
Wage.  And  the  employer  who  can  afford  to  pay  a 
Living  Wage  is  no  more  justified  in  using  his  supe- 
rior economic  strength  in  this  way  than  he  would  be 
justified  in  using  superior  physical  strength  to  pre- 
vent the  laborer  from  taking  possession  of  a  sack  of 
flour  or  a  suit  of  clothes  that  the  latter  had  bought 
and  paid  for.  In  both  cases  the  laborer  is  deprived 
by  superior  strength  of  something  to  which  he  has 
a  right.  As  a  determinant  of  rights,  economic  force 
has  no  more  validity  or  sacredness  than  physical 
force.  The  other  economic  classes  in  the  commun- 
ity, the  landowner,  the  loan-capitalist,  the  consumer, 
and  the  man  of  wealth,  share  the  responsibility  of 
providing  the  laborer  with  a  decent  livelihood  in  a 
secondary  degree,  and  in  accordance  with  the  nature 
and  possibilities  of  their  several  economic  positions. 
Finally,  the  State  is  morally  bound  to  compel  em- 
ployers to  pay  a  Living  Wage  whenever  and  wher- 
ever it  can,  with  a  moderate  degree  of  success,  put 
into  effect  the  appropriate  legislation. 

The  discussion  carried  on  and  the  considerations 
suggested  in  the  preceding  chapters  point  to  three 
important  conclusions  which  may  briefly  be  set  down 
here.  The  first  is  that  the  determination  of  complete 
justice  in  the  field  of  economic  distribution  is  be- 
wilderingly  difficult.  According  to  the  view  of  the 
writer,  the  order  of  importance  among  the  various 
326 


SUMMARY    AND     CONCLUSION 

canons  of  distributive  justice  is  as  follows :  the  needs 
of  the  worker ;  the  cost  of  preparation  for  tasks  re- 
quiring skill  of  any  kind ;  the  legitimate  risks  of  nec- 
essary business  enterprises ;  the  proportion  of  individ- 
ual energy  expended  by  the  worker ;  the  disagree- 
ableness  of  the  work ;  the  productivity  of  labor ;  and 
the  productivity  of  property,  whether  land  or  capital. 
Most  persons  would  probably  agree  that  in  any  com- 
pletely just  scheme  of  distribution  all  of  these  factors 
would  have  to  be  taken  into  account,  but  not  all  who 
accepted  the  list  would  subscribe  to  this  order.  And 
those  who  accepted  this  order,  or  any  other  order, 
would  find  it  well-nigh  impossible  to  determine  in 
any  particular  case  the  precise  degree  of  importance 
that  ought  to  be  attributed  to  one  factor,  or  canon, 
relatively  to  the  others.  For  example,  men  might 
agree  that  disagreeableness  of  work  is  a  higher  title 
to  wages  than  productivity,  and  yet  disagree  as  to  the 
precise  ratio  of  importance  that  should  be  held  to 
exist  between  these  two  standards.  Even  if  all  the 
difficulties  involved  in  the  problem  of  a  completely 
just  remuneration  of  the  different  agents  of  produc- 
tion were  removed,  there  would  still  be  the  question 
of  the  just  claims  of  the  consumer.  Are  all  the  bene- 
fits resulting  from  improvements  in  production  to 
go  to  the  agents  of  production?  or,  should  the  con- 
sumer share  them  in  the  form  of  lower  prices?  and 
if  so,  in  what  proportion?  Here  we  have  a  conflict 
between  the  productivity  of  the  producers  and  the 
needs  of  the  consumers  which  will  occur  continuous- 
ly, and  for  the  adjustment  of  which  it  is  practically 
impossible  to  lay  down  objective  rules. 
327 


A    LIVING    WAGE 

Tne  second  conclusion  to  be  drawn  is  that  the 
universal  application  of  the  Living  Wage  principle 
would  cause  an  immense  improvement  in  our  in- 
dustrial and  social  conditions.  It  would  mean  an 
increase  in  various  degrees,  in  the  remuneration  of 
more  than  sixty  per  cent,  of  the  male  adults  em- 
ployed in  urban  occupations,  or,  probably,  seventy 
per  cent,  of  those  'n  all  occupations.  It  would  go 
very  far  toward  rei  loving  those  plague  spots  of  our 
cities  in  which  thousands  upon  thousands  of  human 
beings  are  able  to  obtain  only  a  fraction  of  the 
requisites  of  physical  health  and  comfort,  and  are 
foredoomed  from  infancy  to  mental  and  moral  de- 
generacy. Of  the  millions  who  are  now  above  these 
lowest  economic  depths  and  yet  below  the  plane  of  a 
decent  livelihood,  thousands  would  be  freed  from 
the  necessity  of  working  at  an  age  at  which  they 
ought  to  be  in  school ;  thousands  who  at  present  can 
command  only  the  bare  necessities  of  living  would 
realize  for  the  first  time  the  meaning  and  the  bless- 
ings of  moderate  comfort;  thousands  of  men  who 
are  able  to  provide  for  the  present  wants  of  them- 
selves and  families,  but  can  lay  by  nothing  for  the 
contingencies  of  the  future,  would  be  lifted  out  of 
this  depressing  condition;  and  thousands  of  young 
men  who  cannot  now  contemplate  marriage  would 
be  able  to  become  heads  of  families  and  live  as  nor- 
mal human  beings.  For  a  large  proportion  of  those 
who  are  at  present  underpaid,  a  Living  Wage  would 
prove  a  stepping-stone  to  a  still  higher  condition. 
Our  "perpetual  danger  of  overproduction"  would  be 
greatly  diminished,  owing  to  the  enlarged  consuming 

328 


SUMMARY    AND    CONCLUSION 

power  of  the  wage-earning  class.  For  the  same  rea- 
son a  demand  would  be  created  for  the  services  of 
the  greater  number  of  these  who  are  now  constantly 
unemployed.  Finally,  the  nation's  gain  in  physical, 
mental  and  moral  health,  and  in  the  increase  of  con- 
tentment and  good  feeling  among  its  citizens,  would 
ensure  its  continued  pre-eminence  among  the  world's 
happiest,  most  vigorous,  and  most  progressive  peo- 
ples. 

In  the  third  place,  it  may  be  safely  asserted  that 
an  earnest  and  systematic  endeavor  to  extend  the 
Living  Wage  principle  throughout  the  entire  field  of 
industry,  would  be  followed  by  a  larger  measure  of 
beneficial  results  than  any  other  method  of  industrial 
reform  that  could  be  pursued.  The  means  that  may 
be  efficaciously  employed  in  this  endeavor  are  briefly, 
mor?l  suasion  and  social  effort.  Both  of  them 
are  now  unduly  magnified  and  now  unduly  mini- 
mized by  partizan  advocates.  We  are  not  in- 
frequently assured  that,  "only  religion  will  solve  the 
labor  question."  Most  certainly  it  will  not  be  per- 
manently and  adequately  solved  zvithout  religion, 
that  is,  without  the  aid  of  religious  agencies  and  a 
larger  infusion  of  the  religious  spirit  into  the  minds 
and  hearts  of  men ;  but  neither  will  religion  suffice  in 
the  absence  of  a  detailed  application  of  moral  prin- 
ciples to  the  relations  of  employer  and  employee. 
Men  may  be  religious  in  the  ordinary  meaning  of  the 
term,  and  yet  remain  so  thoroughly  dominated  b)' 
the  ethical  code  of  unlimited  competition  that  they 
are  blind  to  the  many  forms  of  moral  wrong  which 
that  code  sanctions.     There  are  thousands  of  employ- 

329 


A    LIVING    WAGE 

ers  in  every  church  organization  who  wish  to  live  up 
to  the  standards  of  their  respective  denominations, 
and  believe  that  they  are  succeeding  fairly  well,  who 
nevertheless  feel  no  conscientious  scruples  when  they 
pay  their  employees  much  less  than  a  Living  Wage. 
They  see  no  wrong  in  this,  for  are  they  not  paying 
the  current  rates?  In  other  words,  they  conform  to 
the  standard  of  business  ethics,  instead  of  to  the 
standard  of  Christian  ethics.  The  moral  suasion 
that  will  produce  results  implies  earnest,  continu- 
ous, and  enlightened  activity  on  the  part  of  public 
teachers  and  moulders  of  public  opinion.  If  clergy- 
men would  give  as  much  attention  to  preaching  and 
expounding  the  duty  of  paying  a  Living  Wage  as 
they  do  to  the  explanation  of  other  duties  that  are 
no  more  important,  and  if  they  would  use  all  the 
power  of  their  ecclesiastical  position  to  deprive  recal- 
citrant employers  of  the  church  privileges  that  are 
ordinarily  denied  to  persistently  disobedient  mem- 
bers; and  if  public  speakers  and  writers  who  dis- 
cuss questions  of  industrial  justice  would,  in  concrete 
terms,  hold  up  to  public  denunciation  those  employ- 
ers who  can  pay  a  Living  Wage  and  will  not, — the 
results  would  constitute  an  ample  refutation  of  the 
libelous  assertion  that  employers  cannot  be  got  to 
act  justly  by  moral  suasion.  They  have  never  been 
made  to  feel  a  fraction  of  its  power.  The  term, 
social  effort,  is  here  used  to  describe  the  activity  both 
of  private  associations,  such  as  Labor  Unions,  and  of 
the  State.  It  is  true  that  the  efficiency  of  social 
effort  is  limited  by  the  character  of  the  individuals 
through  whom  the  effort  is  made.  If  individuals 
330 


SUMMARY    AND    CONCLUSION 

have  not  an  intelligent  grasp  of  the  ethical  principles 
involved  in  the  Living  Wage  question,  and  the  will  to 
apply  these  principles  in  practice,  their  achievements 
as  an  organization  will  be  seriously  diminished.  But 
it  is  also  true  that  organized  effort  will  add  very 
materially  to  the  results  that  can  be  accomplished 
through  moral  suasion  addressed  to  individuals. 
This  very  obvious  general  truth  is  superlatively  true 
in  our  time,  when  man's  social  relations  have  be- 
come so  numerous  and  so  complex.  Both  methods 
are  necessary.  There  must  be  an  appeal  to  the 
minds  and  hearts  of  individuals,  and  the  fullest 
utilization  of  the  latent  power  of  organization  and 
social  institutions.  A  reasonable  and  sustained  en- 
deavor to  employ  the  two  methods  in  extending  the 
Living  Wage  principle  will  accomplish  more  for  the 
laboring  class,  especially  for  its  poorest-paid  mem- 
bers, than  a  like  amount  of  effort  expended  in  any 
other  way.  Speaking  comparatively,  the  remedy  is 
efficacious,  and  the  means  of  putting  it  into  effect 
practicable. 


331 


WORKS  OF  REFERENCE 
The  subjoined  list  does  not  profess  to  be  a  com- 
plete bibliography,  but  it  includes  substantially  all 
the  works  used  by  the  author  in  the  preparation  of 
this  volume.  The  editions  noted  are  those  to  which 
he  has  had  access,  and  which  are  cited  in  the  text. 

I.    ETHICAL  AND   POLITICAL 
Abbott,  Lyman,  The  Rights  of  Man,  New  York,  1901. 
Aquinas,  S.  Thomas,  Summa  Theologica,  Rome,  1894. 
Ardant,  Gabriel,  Papes  et  paysans,  Paris,  1891. 
Bonacina,  Martinus,  De  Contractibus,  Venice,  1754. 
Bosanquet,  Bernard,  The  Philosophical  Theory  of  the 

State,  New  York,  1899. 
Bouquillon,  Thos.  J.,  Theologia  Moralis  Fundamentalis, 

Paris,  1903. 

,  De  Virtutibus  Theologicis,  Bruges,  1890. 

Bowne,  Borden,  P.,  Principles  of  Ethics,  New  York, 

1892. 
Capart,  A.,  La  propriete  individuelle  et  le  collectivisme, 

Namur,  1898. 
Carnegie,  Andrew,  The  Gospel  of  Wealth,  New  York, 

1900. 
Castelein,    A.,    Institutiones    Philosophiae    Moralis    et 

Socialis,  Brussels,  1899. 
Cathrein,  Victor,  Moralphilosophie,  Freiburg,   1904. 
,     Socialism.    Translation     by     Gettelmann,     St. 

Louis,  1904. 
Cliffe-Leslie,  T.  E.,  Essays  in  Political  and  Moral  Phil- 
osophy, London,  1888. 
Cone,  Orello,  Rich  and  Poor  in  the  New  Testament, 

New  York,  1902. 

333 


A    LIVING    WAGE 

Costa-Rosetti,  Julius,  Philosophia  Moralis,  Innsbruck, 
1886. 

Dyde,  S.  W.,  Hegel's  Philosophy  of  Right,  London,  1896. 

Ely,  Richard  T.,  Social  Aspects  of  Christianity,  New 
York,  1889. 

Fichte,  J.  G.,  The  Science  of  Rights.  Translated  by 
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Garnier,  Henri,  De  1'  idee  du  juste  prix,  Paris,  igoo. 

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Lemkuhl,  A.,  Theologia  Moralis,  Freiburg,  1893. 

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Menger,  Anton,  The  Right  to  the  Whole  Produce  of 
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Sidgwick,  Henry,  Methods  of  Ethics,  London,  1901. 

Smith,  Adam,  Theory  of  the  Moral  Sentiments,  Edin- 
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Stephen,  Leslie,  Social  Rights  and  Duties,  New  York, 
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Sterrett,  J.  M.,  The  Ethics  of  Hegel,  Boston,  1893. 

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Taparelli    d'  Azeglio,  Le  droit  naturel,  Paris,  1883. 

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Jannet,  Claudio,  Le  capital,  la  speculation,  et  la  finance, 
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Jenks,  J.  W.,  The  Trust  Problem,  New  York,  1900. 

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22  337 


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Malthus,  T.  R.,  Principles  of  Population,  London,  1826. 
Marshall,    A.,    Principles   of    Political    Economy,    New 

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Martin-Sainte-Leon,  E.,  Histoire  des  corporations  des 

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1896. 
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■ ,  The  Consumption  of  Wealth,  Philadelphia,  1901. 

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WORKS    OF    REFERENCE 

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Ricardo,   David,    Principles   of   Political   Economy   and 
Taxation,  London,  1895. 

Robertson,  J.  M.,  The  Fallacy  of  Saving,  London,  1892. 

Roscher,  W.,  Principles  of  Political  Economy.     Transla- 
tion by  Lalor,  New  York,  1878. 

Rogers,  J.  E.  T.,  Economic  Interpretation  of  History, 
New  York,  1889. 

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Ruskin,  John,  Unto  This  Last,  New  York,  1885. 

Schoenhof,  J.,  The  Economy  of  High  Wages,  New  York, 
1892. 

Seligman,  E.  R.  A.,  Economic  Interpretation  of  History, 
New  York,  1902. 

Shuey,    E.    L.,    Factory    People    and    Their   Employers, 
New  York,  1901. 

Sidgwick,  Henry,  Principles  of  Political  Economy,  New 
York,    1887. 

Smart,  William,  Introduction  to  the  Theory  of  Value, 
London, 1891. 

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Smith,  Adam,  Wealth  of  Nations,  New  York,  1895. 

Soderini,  E.,  Socialism  and  Catholicism.     Translation  by 
Shee,  London,  1896. 

Spahr,    C.    B.,    Present   Distribution   of  Wealth   in   the 
United  States,  New  York,  1896. 

Tarde,  Gabriel,  Psychologie  economique,  Paris,  1902. 

Thompson,  H.  M.,  A  Theory  of  Wages,  London,  1892. 
Toynbee,  Arnold,  The  Industrial  Revolution,  New  York, 

1890. 
Turman,  Max,  Le  catholicisme  social.  Paris,  1900. 
Vandervelde,  E.,  Collectivism  and  the  Industrial  Revolu- 
tion.    Translation  by  Kerr,  Chicago,  1901. 
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Wagner,  A.,  Grundlegung  der  politischen   Oekonomie, 
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339 


A    LIVING    WAGE 

Walker,  F.  A.,  Political  Economy,  New  York,  1887. 

,  The  Wages  Question,  New  York,  1876, 

Walter,  P.,  Die  Propheten  in  ihrem  sozialen  Beruf  und 

das  Wirthschaftsleben  ihrer  Zeit,  St.  Louis,  1900. 
Webb,  Sidney  and  Beatrice,  History  of  Trade  Unionism, 

London,  1902. 

,  Industrial  Democracy,  London,  1897. 

Weiss,  A.,  Apologie  des  Christentums,  Freiburg,  1897. 
Wells,  D.  A.,   Recent   Economic   Changes,  New   York, 

1891. 
Wieser,  F.  Von,  Natural  Value.    Translation  by  C.  A. 

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340 


INDEX 


Abstinence,  and  interest,  258- 
260. 

Adams,  T.  S.,  on  labor  organi- 
zations, 292,  293;  on  compul- 
sory arbitration,  318. 

Antoine,  C,  on  a  Living  Wage, 
85,  86,  IIS- 

Aquinas,  St.  Thomas,  on  just 
wages,  28;  right  to  subsist- 
ence, 69;  ownership,  107; 
superfluous  goods,    271. 

Aristotle,    on    ownership,    70. 

Ashley,  W.  J.,  on  medieval  regu- 
lation, 26;  medieval  criterion 
of   fair   wages,    94. 

Bargaining,     unlimited,     3,     4. 

Birth-rate,  declining,  281,  285, 
286. 

Boehm-Bawerk  E.  von,  on  the 
law  of  price,   192,   193. 

Business  Ability,  relatively  to 
prices  and  profits,  209,  210; 
to  wages,  227,  233,  246,  247. 

Capital,  supply  of,  215,  216  217- 
221,  227,   233;   rights   of,  253. 

Capitalist,  description  of,  211, 
212;  obligation  of,  239;  see 
Loan-Capitalist. 

Carnegie,  Andrew,  on  duties  of 
the  rich,  273,  274;  inheritance 
tax,    322,  323. 

Castelein,  A,  on  a  family  Liv- 
ing Wage,   116. 

Charity,  and  a  family  Living 
Wage,    III. 

Children,  rights  of,  108,  109; 
number  of  in  family,  120-122. 
132;  minimum  age  of  as  wage- 
earners,   133. 


Christian  Authorities,  on  fair 
wages,  26-35;  right  to  sub- 
sistence, 69. 

Clark,  J.  B.,  on  capital  and  pro- 
ductivity of  labor,  174;  ethical 
value  of  productivity,  248;  re- 
striction of  working  popula- 
tion,   286. 

Clark,  Victor  S.,  on  wage- 
legislation  in  Victoria  and 
New  Zealand,  317,  318. 

Clothing,  and  the  content  of 
a   Living   Wage,    134. 

Community,  industrial,  obliga- 
tion of  relatively  to  a  Living 
Wage,   100-102,    190,    191,  238, 

325. 
Competition,  effect  of  on  wages. 
16,    17;    among    different    por- 
tions    of     capital,     213,     214; 
among   laborers,    223-225,    230, 

231- 
Conditions,  social  and  industrial, 

and  a  Living  Wage,  328,  329. 
Consumer,    obligations    of,    264- 

270. 
Consumption,  in  relation  to  pro- 
duction   and    prosperity,     168- 

174. 
Contemporary    Opinion,    on    an 

ethical      standard      of     wages, 

35-37- 
Contract,  free,  as  a  determinant 

of  justice,  5,  10-15,  35-37.  242, 

243.   325- 
Corporations,    and    profits,    210; 

obligations  of,   260,   261. 
Cost    of    Living,    in    certain    in- 


34^ 


INDEX 


dustries,  139-147;  effect  of  a 
Living    Wage    on,    305-308. 

Cultivation,  extension  of  and 
rent,   202,    203. 

Cunningham,  W.,  on  influence 
of  medieval  Christianity,  26; 
injustice  of  economic  extor- 
tion, 36;  responsibility  for 
evils,    268. 

Custom,  and  wages,  4,  226. 

Demand,  and  price,  192-198; 
and  interest,  215;  and  wages, 
226,   232. 

Devas,  C.  S.,  on  content  of  a 
Living  Wage,  129;  right  to 
interest,    258,    259. 

Distribution,  ethical,  various 
canons  of,  74-80,  248,  249; 
economic,    laws    of,    191,    192. 

Duty,  and  rights,  50,  51;  and 
right  to  a  Living  Wage,  118, 
119. 

Economic  Life,  complexity  of 
and    a   Living   Wage,    102-104. 

Economists,  on  competition  and 
fair  wages,  10-19;  influence  of 
on    legislation,    20. 

Efforts,  as  a  canon  of  distribu- 
tion,   77,    248,    249. 

Eight-Hour  Law,  effect  of  a 
universal,    319,    320. 

Employer,  and  obligation  to  pay 
a  Living  Wage,  115,  238-242, 
32s,  326;  and  free  contract, 
242,  243;  and  productivity  of 
labor,  243-248;  and  inability  to 
pay  a  Living  Wage,  249-260, 
262,  263 ;  as  affected  by  a 
universal  Living  Wage,  308- 
311;  and  by  moral  suasion, 
330. 

Equality,  as  a  canon  of  distri- 
bution, 75-78;  between  labor 
and  pay,  85,  86,  111-114;  of 
gains,  as  a  criterion  of  jujt 
price,   87,   90-94,   97. 

Equity,  and  a  family  Living 
Wage,    116. 


Ethical  Teaching,  and  a  Living 
Wage,   330. 

Family,  a  Living  Wage  for, 
110-122;  size  of  normal,  119, 
120;  cost  of  living  of,  139- 
147;  average  income  of,  180, 
181. 

Fertility,    and    rent,    199,    200. 

Fichte,    J.    G.,    on    rights,    64. 

Food,  and  the  content  of  a 
Living   Wage,    134. 

Gilds,  and  the  fixing  of  wages, 
25. 

Gompers,  Samuel,  on  the  con- 
tent of  a  Living  Wage,  129, 
130. 

Hadley,  A.  T.,  on  competition 
and  wages,  17;  overproduc- 
tion, 168;  wages  and  produc- 
tivity, 183;  effects  of  a  rise  in 
wages,  303;  eight-hour  law,  319. 

Hedonism,  and  natural  rights, 
52-54. 

Hegelianism,  and  rights,  59,    60. 

Hobson,  John  A.,  on  rights  of 
productivity,  76;  overproduc- 
tion, 169-172;  wages  and  pro- 
ductivity, 183;  imperialism, 
188,  note;  the  unskilled  la- 
borer,    276. 

Hospitals,    and    the    underpaid, 

277,  278. 

Housing,     and     the     underpaid, 

278,  279,    320,    321. 
Hunter,  Robert,  on  poverty,  175, 

176,  277,  278. 

Imperialism,  and  overproduc- 
tion,   187. 

Income,  national,  and  a  uni- 
versal   Living    Wage,    178-181. 

Industrial  Training,  and  the 
underpaid,    276,    277. 

Industry,  organization  of  rela- 
tively to  interest  and  wages, 
219-221. 

Ingram,  J.  K.,  on  popularity 
of   Malthusian   teaching,   287. 

Interest,    nature    of,    211,    212; 


INDEX 


uniform  rate  of,  213,  214; 
determination  of,  215,  216; 
and  productivity  of  capital, 
216,  217;  and  wages,  217-221; 
ethical    titles   of,    253-260. 

Jevons,  W.  S.,  on  liberty,  299, 
300. 

Justice,  and  a  family  Living 
Wage,    III. 

Just  Price,  and  theory  of  value, 
27,  28;  and  a  Living  Wage, 
86-99. 

Kant,    Immanuel,   on    rights,    64. 

Ketteler,  Archbishop,  and  the 
Living    Wage    doctrine,    34. 

Labor,  and  a  Living  Wage,  79, 
80;  productivity  of,  182-184, 
196,  197,  227-231;  supply  of, 
2i7-e2i,    227. 

Laborers,  unmarried,  and  a 
family  Living  AVage,  120; 
number  of  underpaid,  153-162; 
prospects  of  underpaid,  162- 
177;  non-competing  groups  of, 
223-226;  the  marginal  and 
wages,  229,  230;  claims  of 
underpaid  on  other  classes, 
262-279;  limitation  of  off- 
spring by,  280-287;  increased 
efficiency  of,  287-289;  saving 
by,  289;  total  abstinence  and, 
290,  291;  organization  and, 
276,  291-296. 

Labor  Unions,  and  a  Living 
Wage,    37,    38;    see    Laborers. 

Land,  rent  of,  199-207;  supply 
of   and   wages,   227,  233. 

Landowner,  and  rent,  206;  and 
the  laborer,   239,  262-264,  279. 

Law,  civil,  and  fixing  of  wages, 
2,  19-21,  23-25,  38,  39;  en- 
forcement of  a  Living  Wage 
by,    313-319- 

Law,  economic,  nature  of  and 
relation  to  rates  of  wages, 
7-10. 

Leo  XIII,  Pope,  on  a  Living 
Wage,  32,  33,  no.  III. 

343 


Liberty,  individual,  influence  of 
ideal  of,  12,  13,  19-21;  equal, 
as  the  measure  of  rights,  64; 
relation  of  to  State  regulation 
of    industry,   297-300. 

Lilly,  W.  S.,  on  consumer  and 
underpaid    worker,     264-266. 

Livelihood,  a  Decent,  the  right 
to,  72-80,  324,  32s;  the  basis 
of  right  to  a  Living  Wage, 
99.  100,  117,  118;  difficulty  of 
measuring,  123-125;  absolute 
and  relative,  125-127;  in  terms 
of  goods,  127-136;  in  terms  of 
money,  136-150;  in  the  case 
of     the     employer,    251-253. 

Loan-Capitalist,  obligations  of, 
262-264,  279;  effect  of  a  uni- 
versal   Living    Wage    on,    309. 

Location,  effect  of  on  rent,  200, 
201,   205. 

Luxury,  and  a  Living  Wage, 
184-186;  and  obligations  of 
the  employer,  252,  253;  and 
obligations  of  the  rich,  272, 
273- 

Machinery,  displacing  men,  166- 
168;  causing  overproduction, 
168-174;  latent  possibilities  of, 
187-189;  and  the  rate  of  in- 
terest,   216,    217. 

Marriage,  and  a  reasonable  life, 
117,    118. 

Marshall,  Alfred,  on  economic 
law,  7,  8;  the  content  of  a 
Living  Wage,  128;  consump- 
tion and  productivity,  184; 
luxury,    184. 

Marx,   Karl,   on  value,   196,   197. 

Middle  Ages,  and  just  price, 
98,  99;  and  social  aspect  of 
property,    105-107. 

Middle  Classes,  and  laissez-faire, 
20. 

Mitchell,  John,  on  content  of  a 
Living  Wage,  130,  131,  138, 
139;    organization,    294,    295. 

Monopoly,    and    the    future    of 


INDEX 


the  laborer,  l6g,  l66;  and  free  ' 
contract,    242. 

Moral  Convictions,  and  the  rate 
of  wages,    4,   5. 

Natural  rights,  44-66;  descrip- 
tion of,  44-47;  defence  of, 
48-53;  opposing  theories,  55- 
62;  Catholic  and  Revolution- 
ary views  of,  62-66;  duty  of 
State    to    protect,    301. 

Need,  ordinary,  grave,  and  ex- 
treme,   274,    275. 

Needs,  a  canon  of  distribution, 
^^,  78,  249;  a  measure  of 
just  wages,  112-114;  absolute 
and  conventional,  ■12S-127;  re- 
gular and  occasional,  132-135; 
spiritual,  135,  136;  of  the 
employer,    250-253. 

New  Zealand,  wage-legislation 
of,    38,    39,    315-318. 

Old-Age  Pensions,  and  State  Ac- 
tivity, 321,  322. 

Organization,    see    Laborers. 

Overproduction,  and  the  under- 
paid,   168-174. 

Ownership,  see  Distribution,  Pro- 
perty,   Right. 

Parents,  and  the  wage-rights  of 
a  son,   118,  iig. 

Personality,  and  natural  rights, 
51,  52;  and  right  to  subsist- 
ence, 70-72;  to  a  decent  live- 
lihood, 72,  74,  324;  to  a  Liv- 
ing Wage,  99,  100,  117,  118, 
240. 

Political  Economy,  and  ethical 
conceptions,  5,  6. 

Price,  determination  of,  190-198; 
and  distribution,  190-198;  and 
rent,  203,  204;  and  profits, 
208-210;  effect  of  a  universal 
Living  Wage    on,    303-313. 

Product,  division  of  the  national, 
191,  192;  of  the  marginal 
laborer,  229-232. 

Production,     methods     of     and 


rates  of  interest  and  wages, 
219-221. 

Productivity,  a  canon  of  distri- 
bution, 75-77;  and  high  wages, 
182-184;  latent,  and  a  univer- 
sal Living  Wage,  187-189;  and 
interest,  215,  217;  and  wages, 
227-231,  243-248;  287-289;  not 
always  ascertainable,  244-247; 
as  a  title  to  wages  and  in- 
terest, 248,  249;  253-258. 

Property,  rights  of,  71,  72,  241, 
242;   social  aspect  of,    104-107. 

Profits,  determination  of,  207- 
210. 

Rae,  John,  on  eight-hour  law, 
319. 

Reason,  and  the  titles  of  owner- 
ship,   241,    242. 

Religion,  and  labor  question, 
329.    330. 

Rent,   determination   of,   199-206. 

Reports  of  Labor  Bureaux,  Unit- 
ed States  Census,  and  Con- 
gressional Commissions,  on 
size  of  laborers'  families,  121, 
132;  cost  of  living,  139-147; 
unemployment,  148,  149;  num- 
ber of  underpaid,  154-162; 
movement  of  wages,  162-165; 
organization   of  labor,  293. 

Resources,  national,  and  a  uni- 
versal Living  Wage,  182-189; 
and  interest,  215. 

Revolutionary  Philosophers,  on 
natural    rights,   62,   63, 

Rich,  obligations  of  the,  270-279. 

Right,  the,  to  subsistence,  68-72; 
property,  71,  72;  a  decent  live- 
lihood, 72-80;  equality  in  dis- 
tribution, 75-78;  a  Living 
Wage,    81-122. 

Rights,  of  the  employer,  251-260; 
see    Natural   Rights. 

Right  Conduct,  criterion  of,  48, 
49. 

Ritchie,    D.    G.,    on    rights,    60; 


344 


INDEX 


law  of  nature,  63. 

Rogers,  J.  E.  Thorold,  on 
"Statutes  of  Laborers,"    24- 

Roosevelt,  President,  on  race 
suicide,  284,  285 ;  corporations 
and  national   control,  314. 

Saving,  effect  of  excessive,  168- 
174;  and  interest,  215,  258- 
260;   and  wages,   227,   289. 

Sexual  Self-Restraint,  and  the 
underpaid,  280-287;  economic- 
ally efficacious,  281,  282; 
morally   pernicious,   282-287. 

Shelter,  and  the  content  of  a 
Living  Wage,   134,   135. 

Sidgwick,  Henry,  on  ethical 
teaching  of  the  economists, 
5,   11;   basis  of  rights,  52,  53. 

Small,  A.  W.,  on  content  of  a 
Living   Wage,    136. 

Smart,  W.,  on  freedom  of  con- 
tract, 18;  the  content  of  a 
Living  Wage,  127,  128;  ma- 
chinery, 166,  167;  luxury, 
185;  abolition  of  poverty,  188; 
effects  of  a  rise  in  wages, 
303.    304;    ten-hour    day,    320. 

Smith,  Adam,  on  industrial 
liberty,    12-14. 

Social  Estimate,  the,  as  a  cri- 
terion of  just  price,  88,  89, 
98,  99;  and  of  a  Living  Wage, 
94-96,    116. 

Social  Utility,  and  natural 
rights,  55-62;  and  the  right 
to  a  Living  Wage,  82-85,  "SJ 
and  employer's  obligation, 
IIS,   240,   241. 

State,  the,  and  rights,  55-62; 
and  the  wage-paying  function, 
191,  240;  and  regulation  of 
industry,  297-300 ;  functions 
of,  301,  302;  power  of  to  bring 
about  a  universal  Living 
Wage,    313-323- 

Statutes  of  Laborers,  23-25. 


Subsistence,    the    right    to,    68- 

72- 

Superfluous  Goods,  description 
of,  271-273;  duties  of  pos- 
sessor of,  273-279;  methods 
of    distributing,    275-279. 

Supply,  and  price,  192-198;  and 
interest,  215;  and  wages,  226, 
232. 

Taxation,  of  incomes  and  ia- 
heritances,    322,    323. 

Theological  Writers,  and  Living- 
Wage   doctrine,  97,  98. 

Total  Abstinence,  and  wages  of 
the    underpaid,    290,    291. 

Underpaid,    see    Laborers. 

Undertaker,  his  share  of  the 
product,  208-211;  importance 
of,    246-248;    see    Employer. 

Unemployment,  amount  of,  148, 
149;    and    machinery,    166-168. 

Value,  of  product  relatively  to 
wages,  231,  232,  243i  244; 
see   Price. 

Vermcersch,  A.,  on  a  family 
Living  Wage,  116;  content  of 
a   Living   Wage,    131. 

Victoria,  legislation  of  on  wages, 
38,  31S-318. 

Wage,  a  Living,  economic  feasi- 
bility of,  302-313;  enforce- 
ment of  by  State,  313-319; 
effect  of  on  social  and  in- 
dustrial conditions,  328,  329; 
wisdom  of  striving  for,  329- 
331- 

Wage-Fund,    6. 

Wage-System,  unknown  in 
Middle  Ages,  29;  not  essen- 
tial  to  human  welfare,   68. 

Wages,  difference  between  just 
and  living,  78;  economy  of 
high,  182-184;  and  interest, 
217-221;  nature  of,  222,  223; 
no  tendency  of  to  a  uniform 
level,    223-225;    determination 


345 


INDEX 


of,  226,  227,  232,  233;  and 
productivity,  227-231;  com- 
pletely   just,    326,    327. 

Walker,  F.  A.,  on  resistance  by 
laborers,  279;  benefits  of 
limitation    of    offspring,     282. 

Webb,  Sidney  and  Beatrice,  on 
"Statute  of  Elizabeth,"  23; 
medieval  idea  of  regulation, 
26;  a  Living  Wage,  82,  129; 
declining   birth-rate,    285;    or- 


ganization of  labor,  291, 
292,  294;  economic  feasibility 
of    a    universal    Living   Wage, 

305-307.   313- 
Wife,     the,     should     not    be     a 

wage-earner,    134. 
Women,    rights    of  to    a   Living 

Wage,    107,    108. 
Zigliara,    Cardinal,    on    a   family 

Living   Wage,    iix-114. 


346 


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